Deck 8: Intangible Assets

Question 1

The future economic benefits expected,or hoped,to arise from those internal activities are called:

A)externally generated goodwill
B)internally generated goodwill
C)reputation goodwill
D)equity goodwill

Answer 1

B

Question 2

AASB 138 requires an entity to choose between which models for intangible assets subsequent to their initial recognition?

A)cost and revaluation models
B)revaluation and recoverable amount models
C)cost and recoverable amount models
D)none of the above

Answer 2

A

Question 3

The criteria in AASB 138 identified as being necessary for an intangible asset arising from development to be recognised include:

A)the entity's ability to use or sell the intangible asset
B)the entity's intention to complete the intangible asset and use or sell it
C)the entity's ability to measure reliably the expenditure attributable to the intangible asset during its development
D)all of the above

Answer 3

D

Question 4

The most reliable estimate of the fair value of an intangible asset is:

A)expert valuations of market values
B)quoted market prices in an active market
C)quoted market prices in an inactive market
D)present values of future net cash flows

Question 5

The systematic allocation of the depreciable amount of an intangible asset over its useful life is referred to as:

A)write- down
B)derecognition
C)depreciation
D)amortisation

Question 6

Techniques to be used to estimate the fair values of intangible assets include:

A)estimating the costs the entity avoids by owning the assets
B)discounting estimated future net cash flows from the assets
C)both A and B
D)none of the above

Question 7

Discuss the guidance given in AASB 138 regarding the estimation of the fair value of intangible assets.

Question 8

Which of the following statements regarding AASB 138 is incorrect?

A)it requires expenditure on research or on the research phase of an internal project must be expensed when incurred
B)it specifically prohibits the recognition of internally generated brands,mastheads,publishing titles,customer lists and items similar in substance as intangible assets
C)it allows,in certain circumstances,the recognition of an intangible asset arising from development or from the development phase of an internal project
D)it allows expenditure on research or on the research phase of an internal project to be capitalised as an asset subject to certain criteria

Question 9

Which of the following is not included in the cost of an internally generated intangible asset?

A)costs of materials and services used or consumed in generating the intangible asset
B)fees to register a legal right
C)expenditure on training staff to operate the asset
D)amortisation of patents and licences that are used to generate the intangible asset

Question 10

Examples of expenditures that are not part of the cost of an intangible asset include:

A)costs of testing that the asset is functioning properly
B)costs of employee benefits arising directly from bringing the asset to its working condition
C)costs of conducting business in a new location or with a new class of customer
D)none of the above

Question 11

Which of the following is not an example of a development activity?

A)the design,construction and operation of a pilot plant that is not of a scale economically feasible for commercial production
B)the design,construction and testing of pre- production or pre- use prototypes and models
C)the search for,evaluation and final selection of,applications of research findings or other knowledge
D)the design of tools,jigs,moulds and dies involving new technology

Question 12

A transaction or other event in which an acquirer obtains control of one or more businesses is known as a/an:

A)business combination
B)equity combination
C)business consolidation
D)demerger

Question 13

According to AASB 138,an intangible asset is identifiable if it either:

A)is separable or arises from contractual or legal rights
B)owned by the entity or arises from contractual or legal rights
C)is separable or is owned by the entity
D)none of the above

Question 14

Examples of intangible assets include:

A)intellectual property
B)customer lists
C)trademarks
D)all of the above

Question 15

When acquired in a business combination,the cost of an intangible asset is its:

A)carrying amount at the date of acquisition
B)fair value at the date of acquisition
C)recoverable amount at the date of acquisition
D)none of the above

Question 16

The factors considered in determining the useful life of an intangible asset include:

A)technical,technological,commercial or other types of obsolescence
B)typical product life cycles for the asset
C)expected actions by competitors or potential competitors
D)all of the above

Question 17

Examples of research activities include:

A)activities aimed at obtaining new knowledge
B)the formulation,design,evaluation and final selection of possible alternatives for new or improved materials,devices,products,processes,systems or services
C)the search for alternatives for materials,devices,products,processes,systems or services
D)all of the above

Question 18

Original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding is known as:

A)research
B)analysis
C)development
D)none of the above

Question 19

An intangible shall be recognised if,and only if:

A)it is possible that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost of the asset can be measured reliably
B)it is possible that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost of the asset cannot be measured reliably
C)it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost of the asset cannot be measured reliably
D)it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost of the asset can be measured reliably

Question 20

Which of the following statements regarding AASB 138 is incorrect?

A)intangible assets with a finite useful life must be amortised over the asset's useful life
B)the useful life of an intangible asset may be influenced by both economic and legal factors
C)the residual values of intangible asset having a finite useful life are always assumed to be greater than zero
D)for an intangible asset that arises from contractual or other legal rights,its useful life cannot exceed the period of those rights

Question 21

Explain the difference between research and development.and provide examples of each.

Question 22

Discuss the cost and revaluation models under AASB 138.

Question 23

Identify the tests contained in AASB 138 for the recognition of intangible assets arising from development.

Question 24

Discuss the accounting requirements in AASB 138 for separately acquired intangible assets.

Question 25

Identify some of the factors to be considered in determining the useful life of an intangible asset.