Deck 8: Intangible Assets

Question 1

'Purchased goodwill' is:

A) Recognized only in the unconsolidated financial statements.
B) Recognized only in the consolidated financial statements.
C) Recognized both in the unconsolidated and consolidated financial statements.
D) Never recognized.

Answer 1

C

Question 2

For each type of intangible assets,local GAAPs indicate precisely the duration of amortization.

Answer 2

False

Question 3

The IASB accounting standard currently regulating goodwill accounting is:

A) IAS 22
B) SFAS 142
C) IFRS 3
D) None of these

Answer 3

C

Question 4

What is the duration of the protection offered by a patent?

A) Unlimited.
B) Varies between countries.
C) Lasts generally 10 years.
D) Is generally not defined by law.

Question 5

Which of the following examples is not an example of development activities?

A) The design of tools,jigs,molds and dies involving new technology.
B) The search for,evaluation and final selection of,applications of research findings or other knowledge.
C) The design,construction,and operation of a pilot plant that is not of a scale economically feasible for commercial production.
D) The design,construction,and testing of a chosen alternative for new or improved materials,devices,products,processes,systems,or services.

Question 6

Some countries distinguish between fundamental and ____ research.

A) Pure
B) Applied
C) Experimental
D) Theoretical

Question 7

The R&D intensity can also be computed as R&D expenses/operating expenses.

Question 8

Intangible assets having a finite useful life are not amortized but subject to an impairment test.

Question 9

The acquisition value of soccer players is always expensed.

Question 10

In what way(s)can R&D costs be reported in an income statement organized by function?

A) R&D expenses are reported as a separate function,item or line.
B) R&D is not identified as such but is included in another function,such as selling,general and administrative expenses.
C) R&D is not reported as such but since it has incurred expense,it becomes a part of the cost of goods sold.
D) All of these are correct.

Question 11

There is no relationship between the company's R&D investment and its market value.

Question 12

Internally generated software cannot be capitalized and must therefore be expensed.

Question 13

Since economic benefits derived from intangible assets are uncertain,the cost should be expensed in the period when it incurs.Which principle is put into practice in this statement?

A) Going concern principle
B) Matching principle
C) Prudence principle
D) Accrual principle

Question 14

Recognition policies are the same for purchased and for internally generated intangible assets.

Question 15

Which of the following examples is not an example of research activities?

A) The search for alternative materials,devices,products,processes,systems,or services.
B) Activities aimed at obtaining new knowledge.
C) The design,construction,and testing of pre-production or pre-use prototypes and models.
D) The formulation,design,evaluation,and final selection of possible alternatives for new or improved materials,devices,products,processes,systems,or services.

Question 16

Under the IASB standards,which of the following criteria is not required for R&D capitalization?

A) Intention to complete the intangible asset and use or sell it.
B) Technical feasibility of completing the intangible asset so that it will be available for use or sale.
C) Availability of adequate technical,financial and other resources to complete the development and to use or sell the intangible asset.
D) Ability to measure reliably future economic benefits generated by the intangible asset.

Question 17

A patent is a document granted by a government or an official authority giving the inventor of a product or manufacturing process,the right to use or sell the invention or rights to it.What kind of rights are granted?

A) Limited
B) Exclusive
C) Unique
D) Single

Question 18

Pharmaceutical companies are known to have a high R&D intensity.

Question 19

Intangible assets are usually considered to have no physical substance and to be linked to legal rights.

Question 20

What is a trademark?

A) It is a document granted by a government or an official authority bestowing on the inventor of a product or manufacturing process the exclusive right to use or sell the invention or rights to it.
B) It is a contractual agreement that allows the holder to sell certain products or services.
C) It is the exclusive right to the publication,production and sale of the rights for an intellectual creation.
D) It is a distinctive identification of a manufactured product or of a service.