Which of the following is INCORRECT about the measurement of purchased intangible assets?
A) Purchased intangible assets are measured at cost, which is their fair value at acquisition.
B) Cost includes the acquisition cost and all expenditures necessary to make the intangible asset ready for its intended use.
C) If an intangible asset is acquired due to a government grant, the asset is not recognized in the accounting records as there is no cost to the entity receiving the intangible asset.
D) The cost of the intangible received in a nonmonetary exchange is the fair value of the consideration given or the fair value of the intangible received, whichever is more clearly evident.

Question

Quizplus · Accepted Answer

This is incorrect as according to accounting standards, when a government grant is received in relation to an intangible asset, the asset is recognized at its fair value and the grant is recognized separately as deferred income or a liability.

Which of the Following Is INCORRECT About the Measurement of Purchased