IAS 38 and IAS 36

Which of the following is an objective of IAS 38?

• To prescribe the accounting treatment for intangible assets that are dealt with specifically in another Standard

• To specify how to measure the fair value of intangible assets

• To specify disclosure requirements about intangible assets

• All of the above

Which of the following shall be excluded from the scope of IFRS 16 Leases and shall be accounted in accordance with IAS 38?

• Motion picture films

• Patents and copyrights

• Manuscripts

• All of the above

If an asset incorporates both intangible and tangible elements, it shall be treated under __________.

• IAS 16 Property, Plant and Equipment

• IAS 38 Intangible Assets

• A or B, depending which element is more significant

• A and B

Some intangible assets may be contained in or on a physical substance such as a compact disc (in the case of computer software), legal documentation (in the case of a licence or patent) or film. In determining whether an asset that incorporates both intangible and tangible elements should be treated under IAS 16 Property, Plant and Equipment or as an intangible asset under this Standard, an entity uses judgement to assess which element is more significant. For example, computer software for a computer-controlled machine tool that cannot operate without that specific software is an integral part of the related hardware and it is treated as property, plant and equipment. The same applies to the operating system of a computer. When the software is not an integral part of the related hardware, computer software is treated as an intangible asset. [IAS 38.4]

• A resource that is controlled by an entity as a result of past events

• A resource which value in use exceeds its historical cost

• A resource from which future economic benefits are expected to flow to the entity

• All of the above

Carrying amount is the amount at which an asset is recognised __________.

• After deducting any accumulated depreciation (amortisation)

• After deducting accumulated impairment losses, if any

• Before deducting accumulated impairment losses, if any

• A and B

Which of the following terms does this statement define: “the amount by which the carrying amount of an asset or a cash-generating unit exceeds its recoverable amount”?

• Depreciation

• Fair value

• Impairment loss

• Value in use

An entity shall assess at the end of each reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the entity shall estimate the recoverable amount of the asset. [IAS 36.9]

• A) Cash flows for acquiring the asset, or subsequent cash needs for operating or maintaining it, that are significantly lower than those originally budgeted

• B) Actual net cash flows or operating profit or loss flowing from the asset that are significantly worse than those budgeted

• C) A significant decline in budgeted net cash flows or operating profit, or a significant increase in budgeted loss, flowing from the asset

• B and C

• A and B