Unless acquired under a business combination,intangible assets must be initially measured using which of the following measurement approaches?
A)Discounted cash flows
B)Fair value
C)Net present value
D)Cost

Question

Quizplus · Accepted Answer

According to accounting standards, intangible assets must be initially measured at cost, which includes all expenditures directly related to acquiring or creating the asset, such as legal fees, registration fees, and development costs. The other options, discounted cash flows, fair value, and net present value, may be used to estimate the fair value of an intangible asset in certain circumstances, such as when the asset is acquired through a business combination or when it is being evaluated for impairment. However, the initial measurement of intangible assets must always be at cost.

Unless Acquired Under a Business Combination,intangible Assets Must Be Initially