Essay on Intangible Assets Quiz Questions
1. List two assets which would not meet the ‘identifiable’ aspect of the definition of an intangible asset. (2 Marks)
2. Intangible assets acquired via a separate acquisition are always recognised. Why? (2 Marks)
The price an entity pays to acquire an intangible asset will reflect expectations about future economic benefits of the will flow to the company. This meets the probability test to identify an asset.
3. How is an intangible asset acquired as part of a business combination measured for initial recognition? Why? (2 Marks)
It is measured at fair value as part of the total cost of the business acquisition. This is because the fair …show more content…
4. How it will create future economic benefits
5. The availability of resources to complete
6. The ability to measure reliably the expenditure attributable during development
9. Why does IAS 38, paragraph 63 forbid the recognition of certain internally generated intangible assets? (2 Marks) The cost of developing these internally generated intangibles cannot be distinguished from the cost of developing the business itself.
10. Where an internally generated intangible asset is recognised by an entity how is its cost measured? (2 Marks) The cost of an internally generated intangible asset is the sum of the expenditure incurred from the date when the asset first meets recognition criteria.
11. Why does the accounting standard IAS 38 contend that an active market cannot exist for brands, newspaper mastheads, music and film publishing rights and trademarks? (1 Mark)
Because each asset is unique.
12. List two examples of activities which would be carried out in the development phase of an internal project. (2 Marks)
1. the design, construction and testing of pre-production or pre-use prototypes and models.
2. the design of tools, jigs, moulds and dies involving new technology.
13. What is the revaluation model of accounting for intangible assets and when can it be adopted? (2 Marks)
The revaluation model used a fair value that is determined by an active market. It can only be used when there is an active market for the