Quiz on Intangible Assets

What is required for an item to be recognized as an intangible asset?

• It must meet the definition of intangible assets

• It must be a tangible asset

• It must be a financial asset

• It must be a physical asset

Which of the following is an example of an intangible asset?

• Building

• Land

• Patent

• Inventory

What is the initial recognition criterion for intangible assets?

• It must be probable that future economic benefits will flow to the entity

• It must be a physical asset

• It must be a tangible asset

• It must be a financial asset

What is the fair value of an asset at the acquisition date?

• The market price of the asset

• The estimated future cash flows

• The historical cost of the asset

• The cost of the asset

Which of the following is NOT an example of an intangible asset?

• Franchise

• Customer base

• Copyright

• Trademark

What is the treatment of research phase expenditures?

• They are capitalized as assets

• They are charged to expense when incurred

• They are deferred to future periods

• They are recognized as liabilities

What must be satisfied for development phase expenditures to be recognized as intangible assets?

• Technical feasibility and intention to use

• Legal rights

• Market value

• Historical cost

What is the maximum amortization period for intangible assets in practice?

• Three years

• Indefinite

• Ten years

• Five years

What is the primary reason for expensing subsequent costs for intangible assets?

• They increase the asset's value

• They maintain expected benefits

• They are legally required

• They are not measurable

What is the purpose of impairment testing for intangible assets?

• To calculate depreciation

• To identify if the asset is still beneficial

• To assess the asset's useful life

• To determine the fair value