Intangible assets should be reported as a separate classification on the statement of financial position because they lack physical substance and cannot be classified as property, plant, and equipment or as current assets. This allows for a clear and distinct presentation of the intangible assets and their value to the company.

Solved

Intangible Assets

Question 232

Multiple Choice

Intangible assets

A) should be reported under the heading Property, Plant, and Equipment.
B) are not reported on the statement of financial position because they lack physical substance.
C) should be reported as Current Assets on the statement of financial position.
D) should be reported as a separate classification on the statement of financial position.

Correct Answer: