Worksheets4.1 IAS 38 IA - Recognition & Amortisation
Total questions: 10
Worksheet time: 5mins
What is the main objective of IAS 38 IA - Recognition & Amortisation?
To set rules for deciding when a company can count something as an intangible asset.
To say how companies should figure out the value of tangible assets.
To regulate the number of employees in a company.
To determine the physical location of intangible assets.
How can an intangible asset be identified?
By its weight and size.
By its smell and taste.
By its color and shape.
By being distinguishable from goodwill.
What is required for an intangible asset to be recognized?
The company must have control over it because of future events.
It should bring past economic benefits to the company.
The company must have control over it because of past events.
It should bring future economic benefits to the company.
What is amortization in accounting?
The process of reducing the cost of an intangible asset to zero.
The process of increasing the cost of an intangible asset over time.
The process of spreading out the cost of an intangible asset over its useful life.
The process of doubling the cost of an intangible asset.
Why is internally generated goodwill not recognized as an asset under IAS 38?
Because it is easy to measure the cost of internally developed goodwill.
Because it is legally prohibited.
Because it is difficult to measure the cost of internally developed goodwill.
Because it is not valuable to the company.
What is the importance of control by the entity for an intangible asset to be recognized?
It ensures that the asset is insured.
It allows the company to benefit from the asset in the future and prevent others from using it.
It ensures that the asset is physically present in the company's premises.
It guarantees that the asset will be sold at a profit.
How are expected future economic benefits related to intangible assets?
They are necessary for an asset to be recognized as intangible.
They are not important for financial records.
They have no relation to intangible assets.
They are only considered for tangible assets.
What happens when a company swaps one intangible asset for another?
They discard both assets.
They never swap intangible assets.
They stick with the old asset's cost if the swap doesn't change anything important.
They always use the fair value of the new asset.
How is the cost of an intangible asset spread out over its useful life?
By dividing the total cost by the estimated useful life.
By expensing the entire cost right away.
By reducing the cost each year.
By doubling the cost each year.
What is the definition of an intangible asset?
Something that is legally prohibited.
Something that is intangible but not valuable.
Something valuable a company owns that you can't see or touch.
Something that is physically present in the company's premises.
