(d) The requirement is to identify the criterion that must be met in order for an item to be recognized as an intangible asset other than goodwill. Answer (d) is correct because the asset must be identifiable and lack physical substance .
Which of the following is a criterion that must be met in order for an item to be recognized as an intangible asset?
The item is identifiable and lacks physical substance. IAS 38 are accounting standard and rules when intangible assets are purchased, acquired in business combination and internally generated intangible assets .
Which are the two criteria which must be fulfilled to be able to recognize an intangible asset?
control (power to obtain benefits from the asset) future economic benefits (such as revenues or reduced future costs)
Which of the following are factors that should be considered in determining the useful life of an intangible asset with a limited life?
- Expected usage. The length that the asset is expected to produce benefits for the business. ...
- Product life cycle. ...
- Technical obsolescence. ...
- Competitor action. ...
- Maintenance expenditure.
What are the 3 key elements used to decide whether an intangible fixed asset should be recognized in the accounts?
In order to determine whether or not intangible resources specified in paragraph 07 meet the definition of an intangible fixed asset, the following factors shall be considered: Identifiability, resource controllability and certainty of future economic benefits .
How can you identify an intangible asset?
Intangible assets are measured initially at cost . After initial recognition, an entity usually measures an intangible asset at cost less accumulated amortisation. It may choose to measure the asset at fair value in rare cases when fair value can be determined by reference to an active market.
What does IAS 16 say?
IAS 16 prescribes that an item of property, plant and equipment should be recognised (capitalised) as an asset if it is probable that the future economic benefits associated with the asset will flow to the entity and the cost of the asset can be measured reliably.
What are the examples of intangible assets?
An intangible asset is an asset that is not physical in nature. Goodwill, brand recognition and intellectual property, such as patents, trademarks, and copyrights , are all intangible assets. Intangible assets exist in opposition to tangible assets, which include land, vehicles, equipment, and inventory.
Which of the following is NOT example of an intangible asset?
Land is NOT an example of intangible assets. An intangible asset is an asset that is not physical in nature.
What are the 5 intangible assets?
Examples of intangible assets include goodwill, brand recognition, copyrights, patents, trademarks, trade names, and customer lists . You can divide intangible assets into two categories: intellectual property and goodwill.
What is the method of amortizing intangible assets?
Like depreciation, there are multiple methods a company can use to calculate an intangible asset’s amortization, but the simplest is the straight-line method . ... The company should subtract the residual value from the recorded cost, and then divide that difference by the useful life of the asset.
What is the useful life of intangible assets?
An intangible asset is a non-physical asset that has a useful life of greater than one year . Examples of intangible assets are trademarks, customer lists, motion pictures, franchise agreements, and computer software. More extensive examples of intangible assets are: Artistic assets.
Which of the following intangible assets are amortized over their useful life?
Question: Which intangible assets are amortized over their useful life? trademarks patents goodwill All of these choices are correct.
What are the three major types of intangible assets?
These are assets such as intellectual property, patents, copyrights, trademarks, and trade names .
What is the difference between tangible and intangible products?
Tangible assets are typically physical assets or property owned by a company, such as equipment, buildings, and inventory. ... Intangible assets are non- physical assets that have a monetary value since they represent potential revenue. Intangible assets include patents, copyrights, and a company’s brand.
What is the difference between tangible and intangible personal property?
Intangible personal property is an item of individual value that cannot be touched or held. ... Conversely, tangible personal property, such as machinery, vehicles, jewelry, electronics, and other items can be physically touched and have some level of value assigned to them.
