Question 1

IFRS permits reversals of impairment losses for all limited and indefinite-life intangible assets.

Accepted Answer

A) True 
 B)False  False

Question 2

Limited-life intangibles are amortized by systematic charges to expense over their useful life.

Accepted Answer

A) True 
 B)False  True

Question 3

When a company develops a trademark the costs directly related to securing it should generally be capitalized.Which of the following costs associated with a trademark would not be allowed to be capitalized?

Accepted Answer

A) Attorney fees. 
B) Consulting fees. 
C) Research and development fees. 
D) Design costs. 
A) Attorney fees. 
B) Consulting fees. 
C) Research and development fees. 
D) Design costs. C

Question 4

All of the following are true regarding recovery of impairments for intangible assets except

Accepted Answer

A) After a recovery of impairment has been recognized, the carrying value of the asset reported on the statement of financial position will be the higher of the fair value less cost to sell or the value-in-use. 
B) No recovery of impairment is allowed for Goodwill. 
C) A recovery of impairment will be reported in the "Other income and expense" section of the income statement. 
D) The amount of the recovery is limited to the carrying value of the asset that would have been reported had no impairment occurred. 
A) After a recovery of impairment has been recognized, the carrying value of the asset reported on the statement of financial position will be the higher of the fair value less cost to sell or the value-in-use. 
B) No recovery of impairment is allowed for Goodwill. 
C) A recovery of impairment will be reported in the "Other income and expense" section of the income statement. 
D) The amount of the recovery is limited to the carrying value of the asset that would have been reported had no impairment occurred.

Question 5

Internally generated goodwill associated with a business may be recorded as an asset when a firm offer to purchase that business unit has been received.

Accepted Answer

A) True 
 B)False

Question 6

Factors considered in determining an intangible asset's useful life include all of the following except

Accepted Answer

A) the expected use of the asset. 
B) any legal or contractual provisions that may limit the useful life. 
C) any provisions for renewal or extension of the asset's legal life. 
D) the amortization method used. 
A) the expected use of the asset. 
B) any legal or contractual provisions that may limit the useful life. 
C) any provisions for renewal or extension of the asset's legal life. 
D) the amortization method used.

Question 7

Research and development costs

Accepted Answer

A) are intangible assets. 
B) may result in the development of a patent. 
C) are easily identified with specific projects. 
D) all of the above. 
A) are intangible assets. 
B) may result in the development of a patent. 
C) are easily identified with specific projects. 
D) all of the above.

Question 8

Which of the following would be considered research and development?

Accepted Answer

A) Routine efforts to refine an existing product. 
B) Periodic alterations to existing production lines. 
C) Marketing research to promote a new product. 
D) Construction of prototypes. 
A) Routine efforts to refine an existing product. 
B) Periodic alterations to existing production lines. 
C) Marketing research to promote a new product. 
D) Construction of prototypes.

Question 9

Some intangible assets are not required to be amortized every year.

Accepted Answer

A) True 
 B)False

Question 10

If a company constructs a laboratory building to be used as a research and development facility, the cost of the laboratory building is matched against earnings as

Accepted Answer

A) research and development expense in the period(s) of construction. 
B) depreciation deducted as part of research and development costs. 
C) depreciation or immediate write-off depending on company policy. 
D) an expense at such time as productive research and development has been obtained from the facility. 
A) research and development expense in the period(s) of construction. 
B) depreciation deducted as part of research and development costs. 
C) depreciation or immediate write-off depending on company policy. 
D) an expense at such time as productive research and development has been obtained from the facility.

Question 11

Internally generated goodwill should not be capitalized in the accounts.

Accepted Answer

A) True 
 B)False

Question 12

How should research and development costs be accounted for, according to an IASB Statement?

Accepted Answer

A) Must be capitalized when incurred and then amortized over their estimated useful lives. 
B) Must be expensed in the period incurred. 
C) May be either capitalized or expensed when incurred, depending upon the materiality of the amounts involved. 
D) Must be expensed in the period incurred unless it can be clearly demonstrated that the expenditure will have alternative future uses or unless contractually reimbursable. 
A) Must be capitalized when incurred and then amortized over their estimated useful lives. 
B) Must be expensed in the period incurred. 
C) May be either capitalized or expensed when incurred, depending upon the materiality of the amounts involved. 
D) Must be expensed in the period incurred unless it can be clearly demonstrated that the expenditure will have alternative future uses or unless contractually reimbursable.

Question 13

Which of the following costs should be capitalized in the year incurred?

Accepted Answer

A) Research and development costs. 
B) Costs to internally generate goodwill. 
C) Organizational costs. 
D) Costs to successfully defend a patent. 
A) Research and development costs. 
B) Costs to internally generate goodwill. 
C) Organizational costs. 
D) Costs to successfully defend a patent.

Question 14

The major problem of accounting for intangibles is determining

Accepted Answer

A) fair value. 
B) separability. 
C) salvage value. 
D) useful life. 
A) fair value. 
B) separability. 
C) salvage value. 
D) useful life.

Question 15

Recoveries of impairments for intangible long-lived assets are reported in "other income and expense" on the income statement.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following intangible assets should not be amortized?

Accepted Answer

A) Copyrights 
B) Customer lists 
C) Perpetual franchises 
D) All of these intangible assets should be amortized. 
A) Copyrights 
B) Customer lists 
C) Perpetual franchises 
D) All of these intangible assets should be amortized.

Question 17

The intangible asset goodwill may be

Accepted Answer

A) capitalized only when purchased. 
B) capitalized either when purchased or created internally. 
C) capitalized only when created internally. 
D) written off directly to retained earnings. 
A) capitalized only when purchased. 
B) capitalized either when purchased or created internally. 
C) capitalized only when created internally. 
D) written off directly to retained earnings.

Question 18

One factor that is not considered in determining the useful life of an intangible asset is

Accepted Answer

A) salvage value. 
B) provisions for renewal or extension. 
C) legal life. 
D) expected actions of competitors. 
A) salvage value. 
B) provisions for renewal or extension. 
C) legal life. 
D) expected actions of competitors.

Question 19

Companies are required to assess the estimated useful life and salvage value of intangible assets at least annually.

Accepted Answer

A) True 
 B)False

Question 20

Copyrights should be amortized over

Accepted Answer

A) their legal life. 
B) the life of the creator plus fifty years. 
C) twenty years. 
D) their useful life or legal life, whichever is shorter. 
A) their legal life. 
B) the life of the creator plus fifty years. 
C) twenty years. 
D) their useful life or legal life, whichever is shorter.

Exam 12: Intangible Assets

IFRS permits reversals of impairment losses for all limited and indefinite-life intangible assets.

Limited-life intangibles are amortized by systematic charges to expense over their useful life.

When a company develops a trademark the costs directly related to securing it should generally be capitalized.Which of the following costs associated with a trademark would not be allowed to be capitalized?

All of the following are true regarding recovery of impairments for intangible assets except

Internally generated goodwill associated with a business may be recorded as an asset when a firm offer to purchase that business unit has been received.

Factors considered in determining an intangible asset's useful life include all of the following except

Research and development costs

Which of the following would be considered research and development?

Some intangible assets are not required to be amortized every year.

If a company constructs a laboratory building to be used as a research and development facility, the cost of the laboratory building is matched against earnings as

Internally generated goodwill should not be capitalized in the accounts.

How should research and development costs be accounted for, according to an IASB Statement?

Which of the following costs should be capitalized in the year incurred?

The major problem of accounting for intangibles is determining

Recoveries of impairments for intangible long-lived assets are reported in "other income and expense" on the income statement.

Which of the following intangible assets should not be amortized?

The intangible asset goodwill may be

One factor that is not considered in determining the useful life of an intangible asset is

Companies are required to assess the estimated useful life and salvage value of intangible assets at least annually.

Copyrights should be amortized over

Financial Reporting and Accounting Standards

Conceptual Framework for Financial Reporting

The Accounting Information System

Income Statement and Related Information

Statement of Financial Position and Statement of Cash Flows

Accounting and the Time Value of Money

Cash and Receivables

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Current Liabilities, Provisions, and Contingencies

Non-Current Liabilities

Equity

Dilutive Securities and Earnings Per Share

Investments

Revenue Recognition

Accounting for Income Taxes

Accounting for Pensions and Postretirement Benefits

Accounting for Leases

Accounting Changes and Error Analysis

Statement of Cash Flows

Presentation and Disclosure in Financialreporting

Filters