Advance Accounting

INTANGIBLE ASSETS QUIZ QUESTIONS

1. List two assets which would not meet the ‘identifiable’ aspect of the definition of an intangible asset. (2 Marks)

Goodwill; Knowledge

2. Intangible assets acquired via a separate acquisition are always recognised. Why? (2 Marks)

It is always assumed that the probability recognition criterion is met. It’s believed that a buyer of an asset will determine the price to be paid by taking into account the probability of the future benefits to be received. In addition, the cost of a separately acquired intangible asset can usually be measured reliably.

3. How is an intangible asset acquired as part of a business combination measured for initial recognition? Why? (2 Marks)

An intangible asset acquired as part of a business combination will initially be measured at fair value.

为什么这个还是不知道怎么解释。The fair value of an intangible asset reflects market expectations about the probability that the future economic benefits embodied in the asset will flow to the entity. In other words, the effect of probability is reflected in the fair value measurement of the intangible asset.

4. List two ways that fair value could be determined for intangible assets acquired as part of a business combination. (2 Marks)

1) Quoted market prices in an active market.

2) Recent transactions where no active market exists.

5. In the research phase all expenditure on a project must be expensed. Why? (1 Mark)

Para.55

In the research phase of an internal project, an entity cannot demonstrate that an intangible asset exists that will generate probable future economic benefits. Therefore, this expenditure is recognised as an expense when it is incurred.

6. Identify three ways in which an entity may obtain an intangible asset. (1 Mark)

1) Separate acquisition

2) Acquisition as part of a business combination

3) Internally generated intangible assets

7. Where an intangible asset has been separately acquired how is its...