Question 1

What is the appropriate treatment for re-payment of government grants under IFRS?

Accepted Answer

A) Accounted for prospectively. 
B) Accounted for retrospectively. 
C) Partial prospective treatment and partial retrospective treatment. 
D) Full prospective treatment and full retrospective treatment. 
A) Accounted for prospectively. 
B) Accounted for retrospectively. 
C) Partial prospective treatment and partial retrospective treatment. 
D) Full prospective treatment and full retrospective treatment.

Question 2

Which statement is correct?

Accepted Answer

A) In the exploration phase, the mineral site is ready for mineral production. 
B) In the extraction phase, the mineral site is assessed for commercial viability. 
C) In the extraction phase, the mineral site is assessed for technical viability. 
D) In the development phase, the mineral site is prepared for resource extraction. 
A) In the exploration phase, the mineral site is ready for mineral production. 
B) In the extraction phase, the mineral site is assessed for commercial viability. 
C) In the extraction phase, the mineral site is assessed for technical viability. 
D) In the development phase, the mineral site is prepared for resource extraction.

Question 3

Which statement is correct?

Accepted Answer

A) Under IFRS, research costs must fulfill six specific criteria. 
B) Under IFRS, all research costs must be expensed as incurred. 
C) Development activities must be technically feasible. 
D) Adequate financial resources must exist to complete research activities. 
A) Under IFRS, research costs must fulfill six specific criteria. 
B) Under IFRS, all research costs must be expensed as incurred. 
C) Development activities must be technically feasible. 
D) Adequate financial resources must exist to complete research activities.

Question 4

Kryan Corp. mines and produces aluminum. During 2012, the company explored two new sites and evaluated them for aluminum ore potential. By the December 31, 2012 year-end, both sites remained in the evaluation stage. During 2013, evaluation of site Apollo was completed and the site was deemed to have sufficient quantities of ore; consequently, development of the site began. However, site Braeden was determined to have ore concentrations too low to be commercially viable. The following is the cost of exploration and evaluation incurred on the two sites:
   Required:
Record the journal entries in 2012 and 2013 relating to the exploration and evaluation costs using the successful efforts method. Assume that Kryan has a policy of capitalizing the costs of exploration and evaluation.

Accepted Answer

The answer of Kryan Corp. mines and produces aluminum. During...

Question 5

Which statement is correct?

Accepted Answer

A) Capitalization of costs ceases when the post development phase begins. 
B) The development phase includes generating new ideas or searching for new materials. 
C) The project must meet IAS 38 criteria before research costs can be capitalized. 
D) The post development phase includes designing, constructing or testing a prototype. 
A) Capitalization of costs ceases when the post development phase begins. 
B) The development phase includes generating new ideas or searching for new materials. 
C) The project must meet IAS 38 criteria before research costs can be capitalized. 
D) The post development phase includes designing, constructing or testing a prototype.

Question 6

Explain the accounting for internally developed intangible assets.

Accepted Answer

•IAS 38 identifies two distinct stages f

Question 7

How does IFRS require that government grants for property, plant and equipment (PPE)be recorded?

Accepted Answer

A) The government grant should be recorded using the income approach. 
B) The government grant should be recorded using the capital approach. 
C) The government grant should not be recorded using either the income or capital approach. 
D)  IFRS do not provide any guidance for recording government grant. 
A) The government grant should be recorded using the income approach. 
B) The government grant should be recorded using the capital approach. 
C) The government grant should not be recorded using either the income or capital approach. 
D)  IFRS do not provide any guidance for recording government grant.

Question 8

Calculate the missing amounts by completing the table below.

Accepted Answer

The answer of Calculate the missing amounts by completing the...

Question 9

Which of the following is a difference between intangible assets and property, plant and equipment (PPE)?

Accepted Answer

A) Intangibles lack physical substance. 
B) PPE benefit more than one year. 
C) Intangibles are held for use in the ordinary course of business. 
D) Intangible assets are generally identifiable. 
A) Intangibles lack physical substance. 
B) PPE benefit more than one year. 
C) Intangibles are held for use in the ordinary course of business. 
D) Intangible assets are generally identifiable.

Question 10

Which statement is correct?

Accepted Answer

A) Research is original or planned investigation to gather new knowledge or understanding. 
B) Under IFRS all research costs can be either capitalized or expensed. 
C) Research activities must be technically feasible as well as commercially viable. 
D) Research is application of findings or knowledge towards new plans, designs or products. 
A) Research is original or planned investigation to gather new knowledge or understanding. 
B) Under IFRS all research costs can be either capitalized or expensed. 
C) Research activities must be technically feasible as well as commercially viable. 
D) Research is application of findings or knowledge towards new plans, designs or products.

Question 11

Which statement is not correct?

Accepted Answer

A) Under the successful efforts method, costs of all projects remain capitalized. 
B) ASPE allows either the full cost or successful efforts method to be used. 
C) Under the successful efforts method, only costs of successful projects remain capitalized. 
D) Under IFRS, all costs must be expensed if a mineral site is not worthy of further exploration. 
A) Under the successful efforts method, costs of all projects remain capitalized. 
B) ASPE allows either the full cost or successful efforts method to be used. 
C) Under the successful efforts method, only costs of successful projects remain capitalized. 
D) Under IFRS, all costs must be expensed if a mineral site is not worthy of further exploration.

Question 12

Research Corp., a publicly accountable entity, incurred the following costs in its research and development division:   At July 31, 2012, Research Corp. determined that the project was technically feasible and commercially viable. Research Corp. had sufficient resources and intentions to complete the project and was confident that there was demand in the marketplace for the product. How much, if any, of the costs can be capitalized for fiscal 2012?

Accepted Answer

A) $0 
B) $44,000 
C) $59,000 
D) $92,000 
A) $0 
B) $44,000 
C) $59,000 
D) $92,000

Question 13

Explain how earnings can be manipulated through choices made in the estimated useful lives for intangible assets.

Accepted Answer

The determination of the useful life of

Question 14

Xavier Corp capitalized exploration and evaluation costs of $470,000. A further $1,357,000 was spent on tangible property, plant, and equipment to develop an oil well. Reserves at the beginning of the year were 480,000 barrels. During the year, the Corp produced 57,600 barrels of oil.
Calculate the amounts for depletion and depreciation.

Accepted Answer

The answer of Xavier Corp capitalized exploration and evaluation costs...

Question 15

Which statement is correct?

Accepted Answer

A) Costs can continue to be capitalized in the post development phase. 
B) The project must meet IAS 38 criteria before development costs can be capitalized. 
C) The development phase includes generating new ideas or searching for new materials. 
D) The research phase includes designing, constructing or testing a prototype. 
A) Costs can continue to be capitalized in the post development phase. 
B) The project must meet IAS 38 criteria before development costs can be capitalized. 
C) The development phase includes generating new ideas or searching for new materials. 
D) The research phase includes designing, constructing or testing a prototype.

Question 16

Which of the following is not a characteristic of an intangible asset?

Accepted Answer

A) It has no physical substance. 
B) Its useful life may exceed its legal life. 
C) It may be amortized using the straight-line method. 
D) It may be impaired and written off. 
A) It has no physical substance. 
B) Its useful life may exceed its legal life. 
C) It may be amortized using the straight-line method. 
D) It may be impaired and written off.

Question 17

Soorya Resources incurred the following costs:   How much would be recorded as depletion expense under the successful efforts method?

Accepted Answer

A) $5,000 
B) $15,000 
C) $30,000 
D) $45,000 
A) $5,000 
B) $15,000 
C) $30,000 
D) $45,000

Question 18

Soorya Resources incurred the following costs:   How much would be capitalized as "intangible assets" under the full cost method?

Accepted Answer

A) $300,000 
B) $400,000 
C) $500,000 
D) $600,000 
A) $300,000 
B) $400,000 
C) $500,000 
D) $600,000

Question 19

Why is it important to understand the difference between research costs and development costs?

Accepted Answer

IFRS makes a distinction between researc

Question 20

Explain the accounting for assets in the mineral resource exploration industry.

Accepted Answer

•Enterprises engaged in mineral explorat

What is the appropriate treatment for re-payment of government grants under IFRS?

Which statement is correct?

Which statement is correct?

Which statement is correct?

Explain the accounting for internally developed intangible assets.

How does IFRS require that government grants for property, plant and equipment (PPE)be recorded?

Calculate the missing amounts by completing the table below.

Which of the following is a difference between intangible assets and property, plant and equipment (PPE)?

Which statement is correct?

Which statement is not correct?

Explain how earnings can be manipulated through choices made in the estimated useful lives for intangible assets.

Which statement is correct?

Which of the following is not a characteristic of an intangible asset?

Soorya Resources incurred the following costs: How much would be recorded as depletion expense under the successful efforts method?

Soorya Resources incurred the following costs: How much would be capitalized as "intangible assets" under the full cost method?

Why is it important to understand the difference between research costs and development costs?

Explain the accounting for assets in the mineral resource exploration industry.

Fundamentals of Financial Accounting Theory

Conceptual Frameworks for Financial Reporting

Accrual Accounting

Revenue Recognition

Cash and Receivables

Inventories

Financial Assets

Property, Plant, and Equipment

Applications of Fair Value to Non-Current Assets

Filters

Exam 9: Intangible Assets, Goodwill, Mineral Resources, and Government Grants

What is the appropriate treatment for re-payment of government grants under IFRS?

Which statement is correct?

Which statement is correct?

Which statement is correct?

Explain the accounting for internally developed intangible assets.

How does IFRS require that government grants for property, plant and equipment (PPE)be recorded?

Calculate the missing amounts by completing the table below.

Which of the following is a difference between intangible assets and property, plant and equipment (PPE)?

Which statement is correct?

Which statement is not correct?

Explain how earnings can be manipulated through choices made in the estimated useful lives for intangible assets.

Which statement is correct?

Which of the following is not a characteristic of an intangible asset?

Soorya Resources incurred the following costs: How much would be recorded as depletion expense under the successful efforts method?

Soorya Resources incurred the following costs: How much would be capitalized as "intangible assets" under the full cost method?

Why is it important to understand the difference between research costs and development costs?

Explain the accounting for assets in the mineral resource exploration industry.

Fundamentals of Financial Accounting Theory

Conceptual Frameworks for Financial Reporting

Accrual Accounting

Revenue Recognition

Cash and Receivables

Inventories

Financial Assets

Property, Plant, and Equipment

Applications of Fair Value to Non-Current Assets

Filters