EBA2013 - LU2 (Intangible Assets)

An intangible asset has (i) future economic benefits and (ii) the cost of the asset can be measured reliably.

• True

• False

An example of intangible assets, EXCEPT

• Patents and copyrights

• Franchises and concessions

• Trademark

• Goodwill

• Impairment

Almost ALL internally generated intangibles are not recognized as intangible assets because typically there are uncertainties involving the identifiability and control of the assets.

• True

• False

Research and development (R&D) expenditures are NOT allowed to be recognized as intangible assets.

• True

• False

• Subject to limitation

Para 57 MFRS 138 states conditions that should be satisfied for an R&D outcome recognised as intangible assets, EXCEPT

• There is a feasibility to complete the asset

• There is a future economic benefit generated from the asset

• The entity can measure the development expenditure reliably

• R&D must be able to obtain knowledge is a requirement of asset recognition

The Clarification of Acceptable Methods of Depreciation and Amortization (Amendments to MFRS 116 and MFRS 138) clarifies the possibility of adopting revenue generated by an activity as an amortization method for intangible assets.

• True

• False

MFRS 138 do prescribe a maximum period of amortization but, in practice, the amortization period does not exceed five years.

• True

• False

Does amortization have a similar concept to depreciation?

• Yes

• No

Intangible assets could be subject to impairment. For intangible assets with finite life, test of impairment is performed only when there is an indication that the assets are impaired.

• True

• False

When an intangible assets derecognise, it should be removed from the Statement of Financial Position when they are sold or when no further future economic benefits are expected from them.

• True

• False