IAS 38

Question 1

What is an asset according to IAS 38?

Answer 1

An asset is a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity.

Question 2

What are the two criteria for control of an asset?

Answer 2

• Has the power to obtain future economic benefits
• Has the power to restrict access of others to those benefits

Question 3

What can future economic benefits from an asset include?

Answer 3

• Revenue from sale
• Cost savings

Question 4

What is an intangible asset?

Answer 4

An identifiable non-monetary asset without physical substance.

Question 5

What makes an intangible asset identifiable?

Answer 5

• Separable, capable of being sold, transferred, licensed, rented, or exchanged
• Arises from contractual or other legal rights

Question 6

What is the definition of non-monetary assets?

Answer 6

Assets that are not cash or cash equivalents and do not have a fixed or determinable amount of money.

Question 7

What is the difference between monetary and non-monetary assets?

Answer 7

Monetary assets include cash and receivables, while non-monetary assets do not have physical substance.

Question 8

How do you determine whether to apply IAS 16 or IAS 38?

Answer 8

Use judgment to determine which part is more significant; if the intangible element is integral to the hardware, treat the whole asset under IAS 16.

Question 9

Give an example of an intangible asset contained in physical substance.

Answer 9

• Software on compact disc
• License or patent on legal documentation

Question 10

Fill in the blank: An intangible asset is an identifiable non-monetary asset without _______.

Answer 10

physical substance

Question 11

True or False: Control of an asset is always based on legal rights.

Answer 11

False

Question 12

List some examples of intangible resources.

Answer 12

• Computer software
• Patents
• Copyrights
• Motion picture films