F3 - M7 - Intangibles

Question 1

________ are long-lived legal rights and competitive advantages developed or acquired by a business enterprise, including patents, copyrights, trademarks, and goodwill.

Answer 1

Intangible assets

Question 2

Purchased identifiable intangible assets should be recorded at _____ plus __________ necessary to purchase.

Answer 2

cost; additional expenditures

Question 3

Under U.S. GAAP, ___________related to internally developed intangible assets must be ______.

Answer 3

research and development costs; expensed

Question 4

Under IFRS, research costs must be ______, but development costs may be ________ if certain criteria are met.

Answer 4

expensed; capitalized

Question 5

Identifiable intangibles with finite lives are amortized over the _____ of the estimated economic life and the legal life.

Answer 5

shorter of the estimated economic life and the legal life.

Question 6

Goodwill and identifiable intangibles with indefinite lives are ______ and are subject to _______ testing.

Answer 6

not amortized; impairment testing

Question 7

Under U.S. GAAP, intangible assets are reported at ________less ______ (finite life intangibles only) and ________.

Answer 7

cost less amortization; impairment

Question 8

Under IFRS, intangible assets may be reported using the ______ (same as U.S. GAAP) or the ______ model.

Answer 8

cost model or Revaluation model

Question 9

Revalued intangible assets are reported at ______ on the revaluation date less _____________ and _______.

Answer 9

fair value; subsequent amortization; impairment

Question 10

_________ are reported on the income statement and revaluation gains are generally reported in other comprehensive income.

Answer 10

Revaluation losses

Question 11

Revaluation losses are reported on the _________ and revaluation gains are generally reported in __________________.

Answer 11

income statement; other comprehensive income

Question 12

The present value of the _______ or _______ by a franchisee (the initial franchise fees) is recorded as an _______ on the balance sheet and amortized over the ___________ of the franchise.

Answer 12

amount paid; be paid; intangible asset; expected period of benefit

Question 13

In financial accounting, start-up costs are ______ as incurred

Answer 13

expensed

Question 14

U.S. GAAP requires research and development (R&D) expenditures to be ________ as incurred. Assets with alternative future uses can be ______________.

Answer 14

expensed; expensed over time

Question 15

Under U.S. GAAP, when parties contract for R&D services to be performed by another firm, the buyer of R&D will _________ amounts as services are obtained from the provider.

Answer 15

expense

Question 16

when parties contract for R&D services to be performed by another firm, the seller will expense costs as ________

Answer 16

cost of goods sold.

Question 17

For R&D, Under IFRS, _______ are expensed and __________ may be capitalized if certain criteria are met.

Answer 17

research costs; development costs

Question 18

Under U.S. GAAP, if computer software is to be sold, leased, or licensed, the time line is the key. _____ the development costs from concept to ____________

Answer 18

Expense; technological feasibility.

Question 19

________ the costs from technological feasibility through the start of selling activity.

Answer 19

Capitalize

Question 20

For Computer software development - Resume _________ further development costs after selling has started.

Answer 20

expensing

Question 21

Costs capitalized between technological feasibility and the start of selling are amortized using the greater of ________________

Answer 21

two methods: percentage of revenue or straight-line.

Question 22

Under U.S. GAAP, if computer software is to be used internally, the development costs need to be _________________

Answer 22

amortized on the straight-line basis.

Question 23

_____ does not provide separate guidance regarding computer software development costs.

Answer 23

IFRS

Question 24

Under IFRS, Research costs must be expensed and ____________ may be capitalized if certain criteria are met.

Answer 24

Research costs; development costs