ACCCOB2_7_Intangible Assets

A distinguishing characteristic of intangible assets is that the extent and timing of their future benefits typically are highly uncertain.

• T

• F

Companies are required to assess the estimated useful life and salvage value of intangible assets at least annually.

• T

• F

The cost of purchased patents should be amortized over the remaining legal life of the patent.

• T

• F

Intangible assets are reported on the statement of financial position

• with an accumulated depreciation account.

• in the property, plant, and equipment section.

• as a separate item.

• as a natural resource subject to depletion.

Which of the following does NOT describe intangible assets?

• They lack physical existence.

• They are financial assets.

• They provide long-term benefits.

• They are classified as long-term assets.

Costs incurred internally to create intangibles are

• capitalized.

• capitalized if they have an indefinite life.

• expensed as incurred.

• expensed only if they have a limited life.

Generally, intangible assets with definite limited life are reported at their

• replacement cost.

• carrying amount.

• acquisition cost.

• fair market value.

The cost of an intangible asset includes all of the following EXCEPT

• purchase price.

• legal fees for registration.

• other directly attributable costs.

• legal fees to defend the intangible asset.

Factors considered in determining an intangible asset’s useful life include all of the following EXCEPT

• the expected use of the asset.

• any legal or contractual provisions that may limit the useful life.

• any provisions for renewal or extension of the asset’s legal life.

• the amortization method used.

Under current accounting practice, intangible assets are classified as

• amortizable or unamortizable.

• limited-life or indefinite-life.

• specifically identifiable or goodwill-type.

• legally restricted or goodwill-type.