IAS 38 - Intangible Assets Flashcards

1
Q

what is an intangible asset

A

an asset that is separable, has monetary value but without physical substance

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2
Q

what does it mean if an asset is separable

A

can be divided from the entitity and sold, transferred or echanged, rented

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3
Q

examples of regular intangible assets

A

brand name
license
customer list
masthead
goodwill
patents

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4
Q

recognition criteria of intangible assets

A
  • will generate future economic benefits
  • cost can be measured reliably
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5
Q

at what value should intangible assets be measured at initially

A

cost

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6
Q

can internally generated intangible assets be recognised

A

no

value cannot be measured reliably

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7
Q

exception of internally generated intangible asset that can be recognised

A

development

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8
Q

example of irregular intangible asset

A

research and development

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9
Q

what is amortisation

A

depreciation of intangible assets

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10
Q

amortisation methods

A

straight line
diminishing value

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11
Q

how often should review of useful life and amortisation method take place

A

annually

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12
Q

what is research

A

investigation undertaken to gain scientific/technical knowledge and understanding

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13
Q

what is development

A

application of research findings to plan/design for production before commerical use

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14
Q

where is research expenditure charged

A

SPL
when it is incurred

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15
Q

what is the criteria for development expenditure to be capitalised

A

Probable to make future economic benefit

Intention to complete project

Resources available to complete

Ability to use/sell asset

Technically feaasible

Expenditure can be realiably separated

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16
Q

how to account for development expendityre

A

DR intangible asset
CR Bank

17
Q

is research and development always for something you will sell

A

no could be improvement of processes that will result in cost savinfs

18
Q

when does amortisation of development expenditure begin

A

when commercial production starts

accruals/matching concept

19
Q

why is it good that development expenditure can be capitalised

A

significant impact on P and L