Flashcards in Intangible Assets (Chapter 4) Deck (13)
What IAS covers Intangible Assets?
What is the definition of an Intangible Asset?
An identifiable asset without physical substance.
What is the recognition criteria for an intangible asset?
1. Probable future economic benefits
2. Cost can be measured reliably
True or False: Internally generated goodwill can be recognised as an intangible asset.
False. Internally generated is never capitalised.
Are Intangible Assets are most likely to be valued using the cost or revaluation model?
Cost model most likely. Intangible assets can only be recognised if there is an active market for them - as such the item is usually too specialised to have its own active market.
Government grants can be capitalised. True or False.
In which financial statement are research costs recognised?
Statement of Profit and Loss
What is the PIRATE criteria needed in order to capitalise the development phase as an intangible asset?
Probable future economic benefit
Intention to complete and use/sell asset
Resources adequate to complete and use/sell
Ability to use/sell
Technical feasibility of the asset
Expenditure can be measured reliably.
When do we amortise an intangible asset?
When there is a finite useful life.
When do we begin to amortise an intangible asset?
From the date at which the asset is ready for use.
How often should the amortisation of an intangible asset be reviewed?
Annually at financial year end.
When is an intangible asset not amortised?
When there is an indefinite useful life?