Intangible Assets Quiz

Which of the following is a characteristic of an intangible asset under IAS 38?

• Physical existence

• Identifiability

• Tangibility

• Historical cost

Goodwill arising from the acquisition of a subsidiary is:

• Amortized over its useful life

• Immediately written off to profit or loss

• Tested annually for impairment

• Treated as a contingent liability

Development costs can be capitalized when:

• The project has started

• Technical feasibility has been demonstrated

• Costs exceed $100,000

• Revenue has been generated

Which of the following is NOT a requirement for the recognition of an intangible asset?

• Probable future economic benefits

• Reliable measurement of cost

• Physical presence

• Control over the resource

An example of an internally generated intangible asset is:

• Patent purchased from another company

• Brand created through advertising

• Software developed in-house

• Franchise license acquired

Under IAS 38, an intangible asset with an indefinite useful life:

• Is amortized over 10 years

• Is not amortized but tested annually for impairment

• Is written off immediately

• Must be revalued annually

Which of the following costs should be expensed as incurred?

• Research costs

• Development costs post-feasibility

• Legal costs for patent registration

• Purchase of a trademark

A company acquires a license for $500,000 with a useful life of 5 years. The annual amortization expense is:

• $50,000

• $100,000

• $25,000

• $200,000

Impairment of an intangible asset occurs when:

• Its market value increases

• Its carrying amount exceeds its recoverable amount

• Amortization expense decreases

• Historical cost changes

Which of the following is a valid example of an intangible asset?

• Land

• Machinery

• Copyright

• Inventory