INTANGIBLE ASSETS

Question 1

COST expensed in prior years could be capitalized. T or F?

Answer 1

False. Reinstatement is NOT allowed.

Question 2

Cost that will be incurred in the future is capitalizable. T or F?

Answer 2

False. Cost will be capitalized when INCURRED.

Question 3

SEQUENCE OF ACTIVITIES FOR INTERNALLY GENERATED ASSETS

Answer 3

Research - Development - Commercial Production

Note: R & D take place BEFORE production.

EXCLUDE:
Commercial production/ activity - chargeable to inventory.

INCLUDE:
“New”
“Modification”

Question 4

Development expenditures will be capitalized only if it satisfy certain criteria. What criteria are these?

Answer 4

TIA, PRE