Intangible Assets Quiz Questions ANS Essay

1364 Words Apr 24th, 2015 6 Pages
ADVANCED FINANCIAL ACCOUNTING 260
INTANGIBLE ASSETS
QUIZ QUESTIONS
1. List two assets which would not meet the ‘identifiable’ aspect of the definition of an intangible asset. (2 Marks)

Answer: Goodwill and Knowledge. These items are either not separable from the company or do not meet the definition of an asset because the benefits they represent cannot be controlled by the entity.

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

The probability recognition criterion is always considered to be satisfied for separately acquired intangible assets.
The price paid for the asset automatically takes into account the probability of expected benefits to be received.

3. How is an intangible
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(1 Mark)

Answer: An active market cannot exist for brands, newspaper mastheads, music and film publishing rights, patents or trademarks, because each such asset is unique. These items cannot be distinguished from the cost of developing the business as a whole (Para 64).

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, 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)

Answer: After initial recognition, an intangible asset shall be carried at a revalued amount, being its fair value at the date of the revaluation less any subsequent accumulated amortisation and any subsequent accumulated impairment losses. Para. 75 Fair values shall be determined by reference to an active market. Revaluations shall be made with such regularity that at the reporting date the carrying amount of the asset does not differ materially from its fair value. Para.77 the revaluation model is applied after an asset has been initially recognized at cost.

14. When can an entity regard an intangible asset as having an indefinite useful life? (1 Mark)

Answer: Based on an analysis of all of the relevant factors, there is no

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