The cost of intangible asset acquired in business combination is recognized by entity in its book at: a. Cost of acquisition date b. Either at cost or fair value at acquisition date c. Fair value at acquisition date d. Fair value at end of the reporting period

The cost of intangible asset acquired in business combination is recognized by entity in its book at: a. Cost of acquisition date b. Either at cost or fair value at acquisition date c. Fair value at acquisition date d. Fair value at end of the reporting period

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter8: Investing Activities

Section: Chapter Questions

Problem 2BIC

See similar textbooks

Related questions

Q: The following statements are based on PFRS 5 – “Non-current Assets Held for Sale and Discontinued…

A: The objective of PFRS 5 standard is to specify the accounting for assets held for sale, discontinued…

Q: Which of the following assets of an acquiree may not be included when computing for the goodwill…

A: Some special considerations under IFRS 3 that can be recorded as Identifibale net assets even though…

Q: What is the purpose of the adjustments to depreciation expense within the consolidated group when…

A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to…

Q: Unless acquired under a business combination, intangible assets must be initially measured using…

A: Intangible assets are those which does not have physical substance. It includes copyright, goodwill,…

Q: According to IFRS, all of the following pieces of information about intangible assets mustbe…

A: Intangible Assets are measured based upon classification as assets with a finite life or assets with…

Q: Under IFRS, an entity that acquires an intangible asset may use the revaluation model for subsequent…

A: As per IFRS on Intangible Assets, an intangible asset can be revalued only when there is an active…

Q: Under IFRS, when an entity chooses the revaluation model as its accounting policy for measuring…

Q: At the date of purchase, materials, equipment, facilities, and intangibles purchased from others…

A: Recognizing R&D costs, Expense the entire costs, unless the items have alternative future uses…

Q: Compare the financial reporting of the following classifications of intangible assets:purchased,…

A: Intangible assets are those assets which cannot be seen or touched. For example- Goodwill,…

Q: Under what conditions is it appropriate for a businessto use the composite method of depreciation…

A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to its…

Q: When does the cost of land affect an entity's profit or loss? * O When the related revaluation is…

A: The Fixed assets and Investments that are long term in nature i.e. full value of the asset cannot be…

Q: 1. When an item of asset is transferred to and from the classification investment property, carried…

A: Hi student Since there are multiple questions, we will answer only first question. If you want…

Q: A component of an entity when it has actually disposed of the operation and when operation meets the…

A: Answer- As per IFRS 5- Non-current Assets Held for Sale and Discontinued Operations , A…

Q: If an entity recognizes in the carrying amount of an item of property, plant and equipment the cost…

A: Derecognition:- If an entity recognizes in the carrying amount of an item of property, plant, and…

Q: In accounting for the acquisition of assets, the assets acquired are to be recorded at the…

A: Fixed assets of the business are very important assets which includes Land, Plant & Machinery,…

Q: An entity classified a noncurrent asset accounted for under the cost model as held for sale at the…

A: Answer = Option C The lower of carrying amount on the basis that it had never been classified as…

Q: Which statements are correct concerning measurement of cost of property, plant and equipment?

A: Concerning measurement of cost of property, plant and equipment Property, plant, and equipment are…

Q: All of the following are key similarities between GAAP and IFRS with respect to accounting for…

A: Answer: Option c

Q: (1) An intangible asset is acquired in connection with a business acquisition O A. Intangible assets…

A: Intangible Assets The examples for the intangible assets are goodwill, copyright, patent, francize,…

Q: What basic principle do U.S. GAAP and IFRS rely upon in recording the initial acquisition value for…

A: Generally Accepted Accounting Principles (GAAP): Generally Accepted Accounting Principles are the…

Q: When nonmonetary assets are exchanged, a company records the cost of the nonmonetary asset acquired…

A: The cost of the nonmonetary asset acquired will be explained:

Q: An entity that acquires an intangible asset may use the revaluation model for subsequent measurement…

A: Lets start with basic understanding. Intangible asset is considered under IAS 38 " Intangible…

Q: one of the following is a definition of asset: a- a present economic resource controlled by the…

A: An asset is a resource with economic value that a firm controls in lieu of that it will provide a…

Q: An entity starts the capitalization of borrowing costs to the cost of a qualifying asset when *…

A: Borrowing costs are costs that are incurred for borrowing money for the purpose of acquisition,…

Q: An entity that acquires an intangible asset may use the revaluation model for subsequent measurement…

A: Intangible assets are those which does not have physical substance. It includes copyright, goodwill,…

Q: ntangible assets can only be measured using the revaluation model if the acquiring entity:

A: The Answer:

Q: The types of assets that qualify for interest capitalization are Assets that are ready for their…

A: Interest capitalization means the amount of interest which is added in the cost of asset instead of…

Q: With respect to goodwill related to acquisition, an impairment is a one-step process considering the…

A: Impairment Process: The Expected future benefit which can be realized from an assets are compared…

Q: Under IFRS, a company that acquires an intangible asset may use the revaluation model for subsequent…

A: IFRS Policy International Financial Reporting Standards (IFRS) refers to the common set of rules and…

Q: Indicate whether the following items are capitalized or expensed in the current year. a. Purchase…

A: An asset that has no physical appearance but has monetary value is termed as Intangible assets.

Q: Which method of the matching principle is used when a company recognizes depreciation expense on the…

A: Solution: Depreciation is the way of expensing long term assets over its useful life. Depreciation…

Q: Statement 1: When an item of asset is transferred to and from the classification investment…

A: Only two of the Statements are true.

Q: n accounting for the acquisition of asset the asset acquired are to be recorded at the cost of…

A: Assets means the resources which is owned by business and used in business for earning profits.…

Q: Under IFRS, when a company chooses the revaluation model as its accounting policy for measuring…

A: As per International Financial Reporting Standards (IFRS), the company values the property, plant…

Q: I. IAS 16 Property, plant and equipment requires entities to disclose the purchase date of each…

A: IAS 16 Property, plant, and equipment details the accounting treatment of most types of property,…

Q: Which intangible asset is recorded only as part of the acquisition of another company? a. Patent b.…

A: The correct answer is Option (b).

Q: The cost of property acquired by direct cash purchase includes the cash paid and: A. the implied…

A: Property is a type of fixed assets that is being taken or acquired by the business. These can be…

Q: An entity starts the capitalization of borrowing costs to the cost of a qualifying asset when O…

A: The answer for the multiple choice question and relevant explanation are presented hereunder : What…

Q: At the date of purchase, materials, equipment, facilities, and intangibles purchased from others…

A: If any material, equipment or facility which is expected to yield benefit to the entity for more…

Q: Previously held interest at the date of acquisition shall be measured at: O Acquisition cost O…

A: As per IFRS 3: Business combination previously held interest at the date of acquisition shall be…

Q: Choose the correct. Under IFRS, when an entity chooses the revaluation model as its accounting…

A: When an entity chooses the revaluation model as its accounting policy for measuring property, plant,…

Q: The following are properly classified as capital expenditure, except:

A: Capital expenditure is the amount spent by the business to acquire ,…

Q: The following rules represent correct guidelines in the transfer to and from investment property…

A: The investment property is held for earning rental income and capital appreciation from the property…

Q: Which of the following statements is correct? O Intangible assets used in the operation of a…

A: An intangible asset is an asset that is not physical in nature. Goodwill , brand recognition and…

Q: During the measurement period, which of the following may affect the amount of goodwill from…

A: IFRS 3 throws light on business combinations and how contingent consideration is treated in the…

Question

The cost of intangible asset acquired in business combination is recognized by entity in its book at:

a. Cost of acquisition date

b. Either at cost or fair value at acquisition date

c. Fair value at acquisition date

d. Fair value at end of the reporting period

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

1. When an item of asset is transferred to and from the classification investment property, carried using the cost model, the measurement basis at the date of transfer is the a. original cost. b. fair value. c. carrying amount. d. recoverable amount.2. What could be a valid reason for transfers from investment property to property, plant and equipment? a. When there is a change in use b. based on the accountant's discretion c. When the entity adopts the fair value model d. when there is change in asset's life3. An entity has an investment property that is held for rental income. The entity uses the fair value model for reporting the investment property. Which of the following statement is true? a. changes in fair value are reported in profit or loss in the current period b. changes in fair value are reported as an extraordinary gain c. changes in fair value are reported in other comprehensive income for the period d. changes in fair value are…
Which of the following statements are correct? I. IAS 16 Property, plant and equipment requires entities to disclose the purchase date of each asset II. The carrying amount of a non-current asset is the cost or valuation of that asset less accumulated depreciation III. IAS 16 Property, plant and equipment permits entities to make a transfer from the revaluation surplus to retained earnings for excess depreciation on revalue assets IV. Once decided, the useful life of a non-current asset should not be changed
Any excess of the fair value over book value attributable to land on the date of acquisition is to be: a. allocated to other identifiable assets. b. capitalized and amortized. c. charged to Retained Earnings on the date of acquisition. d. taken into income when the Land is sold.
Net book value is Select one: a. Amount of which an asset is recognized in the balance sheet after deducting any accumulated depreciation. b. Net amount which the entity expects to obtain for an asset at the end of its useful life. c. Amount of cash or cash equivalent paid or the fair value of the other consideration given to acquire an asset at the time of its acquisition or construction. d. Cost of an asset or the amount substituted for cost in the financial statements, less its residual value
The identifiable assets acquired and liabilities assumed in a business combination are generally measured at: a. Acquisition-date fair values b. Previous carrying amounts c. Fair value less cost to sell d. Cost
According to IFRS, all of the following pieces of information about intangible assets mustbe disclosed in a company’s financial statements and footnotes except for:A. fair value.B. impairment loss.C. amortization rate.
At acquisition date the net assests of the acquired subsidairy are included in the consolidated financial statement at their acquisition date fair value. However most of the parent assets and liabilities are measured on an historical cost basis . Is this Consistent ? Explain.
At the date of purchase, materials, equipment, facilities, and intangibles purchased from others thathave alternative future uses in research and development should be a. capitalizedb. charged directly to retained earningsc. included in R&D expense immediatelyd. charged as a loss from continuing operations
Question 1. For any single intangible asset that is material to an entity's financial statements, which of the following is required to be disclosed? Select all that apply. A. Remaining amortisation period of the intangible asset B. Carrying amount of the intangible asset C. Line item on the income statement whichtotal amortization is included D. Description of the intangible asset
During the measurement period, which of the following may affect the amount ofgoodwill from business combination? A.New information regarding estimates in the contingent consideration that are not existing atthe date of acquisitionB.Nothing can affect the amount of goodwill.C.New information regarding estimates in the contingent consideration that are existing at thedate of acquisition.D.New information regarding estimates in the contingent consideration
Valuing assets at the amount of cash or equivalents paid or the fair value of the consideration given to acquire them at the time of acquisition most closely describes which measurement of fi nancial statement elements? B . Historical cost.
At the date of purchase, materials, equipment, facilities, and intangibles purchased from others that have alternative future uses in research and development should be included in R&D expense immediately capitalized charged as a loss from continuing operations charged directly to retained earnings