ias 38 intangible assets questions and answers

It requires an entity to recognise an intangible asset if, and only if, specified criteria are met. An intangible asset with an indefinite useful life is tested for impairment when indications exist Also, explain how the criteria is applied to the recognition of separately purchased intangible assets, intangible assets acquired in a business combination and internally generated intangible assets. IAS 38 gives further guidance on all 3 aspects: Identifiability, Control, and ; Future economic benefits. Under IAS 38, Intangible Assets are property that does not have a physical form but meets the three definition criteria: identifiable, controllable property that provides future economic benefits. Students who practice questions generally learn more effectively than those who don’t. Find out more about the benefits of membership and joining details. Internally generated brands are often cited as the big example here, prohibiting entities from recognising items, due to their subjective and fluctuating nature. Welcome to AccountantAnswer Forum, where you can ask questions and receive answers. Separate acquisition of intangible assets. Measurement after recognition 5. IAS 38 Intangible Assets sets out the recognition criteria, measurement bases and disclosure requirements for intangible assets not dealt with specifically in another standard. An asset is a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity. Click here to take the IAS 38 Quiz. Quiz complete. It defines intangible asset as an identifiable non-monetary asset without physical substance. Thank you for your time. Examples include: patents, licenses, & … Under IAS 38.21, it puts down recognition criteria for intangible assets – An entity is required to recognise an intangible asset, whether purchased or self-created (at cost) if, and only if: It is probable that the future economic benefits that are attributable to the asset will flow to the entity; and Download all DipIFR course notes, track your progress, option to buy premium content and subscribe to eNewsletters and recaps. 2011 IFRS: IAS 38 Intangible Assets. Your participation in the survey is optional and you may refuse to answer any specific question or exit the entire survey at any time. Hence you can not start it again. The following statements about the provisions of IAS 38 may or may not be correct. I have two questions regarding IAS 38 I was reading f7 bpp book and there is something which i couldnt understand at all from intangible chapter in Recognition of an expense topic Prepaid costs for services, for example advertising or marketing costs for campaigns that have been prepared but not launched, can still be recognised as a prepayment. Find out more about the benefits of membership and joining details. When can you recognise an IA and for how much. Definition of intangible asset 2. Your answers should refer to relevant provisions of International Financial Reporting Standards. REVIEW TESST Question 1 0 out of 2 points IAS 38 Intangible Assets governs the accounting treatment of expenditure on research and development. An intangible asset with an indefinite useful life is tested for impairment when indications exist Answer The following assets are tested for impairment under IAS 36: Goodwill 300, Intangible assets 750, Buildings 500, Machines 100, Total fixed assets 1,650, Question 2 Well NV owns an oil rig that has a carrying value of EUR 100 million. IAS 38 Intangible Assets IAS 38 Intangible Assets 2017 - 05 1 Objective The objective of this Standard is to prescribe the accounting treatment for intangible assets that are not dealt with specifically in another Standard. For example, computer software can be pre-installed on a computer or can be written on external drive and available for installation on any device. Quiz: IAS 38 Intangible assets (Basic) The quiz tests your basic understanding of accounting for Intangible assets (International Accounting Standard 38) Start Quiz IAS 38 ... » Question 03: Multiple IFRSs Post navigation. IAS 38 Intangible Assets prohibits the recognition of internally generated goodwill, thus any reversal of impairment is not recognised. The financial statements for the year ended 30 September 2018 are due to be published shortly. Recognition and measurement 3. Effective 31 March 2004. (i) No intangible asset arising from research shall be recognized. Question 18. In accordance with IAS 38 Intangible Assets, which of the following statements regarding the accounting treatment of an intangible asset is correct? answered Mar 3, 2016 in IAS 38 - Intangible Assets by Tina Level 5 Member (11.6k points) 1 answer A firm implements ERP system in its entities over 2 yrs & capitalizes it centrally by the holding comp.When to amortize? Hence $5 million needs to be charged to profit or loss to undo the reversal. IAS 38 Intangible Assets prohibits the recognition of internally generated goodwill, thus any reversal of impairment is not recognised. Which of the following shall be excluded from the scope of IFRS 16 Leases and shall be accounted in accordance with IAS 38? Intangible assets, other than goodwill, acquired as part of an on-going business or acquired separately: a) Should be never amortised b) Should be amortised systematically over its estimated useful life Examples of intangible assets to be accoun… Intangible assets meeting the relevant recognition criteria are initially measured at cost, subsequently measured at cost or using the revaluation model, and … Effective 31 March 2004. Some intangible assets are contained in or on a physical substance. An intangible asset is an identifiable non-monetary asset without physical substance. Thank you for your time. IAS 38 Question 6 Page 2 of 2 (kashifadeel.com) ANSWER – QUESTION 7: IAS 38 INTANGIBLE ASSETS Part (a) Following are the criteria that should be used while recognizing intangible assets from research and development work. To find out more, see our Cookies Policy •Professional Development will monitor quiz results and follow up with anyone who does not achieve a score of at least 8/10. Welcome to AccountantAnswer Forum, where you can ask questions and receive answers. Which of the following does not define an “asset”? They acknowledged though that providing the context no longer answers the question after the conclusion in respect of service vs. asset has been reached. IAS 38 – Intangible Assets – was primarily issued in order to identify the criteria that need to be present before expenditure on intangible items can be recognised as an asset. The following statements about the provisions of IAS 38 may or may not be correct. The standard also specifies how to measure the carrying amount of intangible assets and requires specified disclosures about intangible assets. Our UPSC IAS question bank will cover all important topics such as general studies (GS), CSAT,GAT and optional subjects. This Standard requires an entity to recognise an intangible asset if, and only if, specified criteria are met. deferred tax assets, goodwill). IAS 38 Intangible Assets 2017 - 05 2 An asset is identifiable if it is either: (a) separable, i.e. A long held principle of IAS 38 is that the majority of internally generated intangible assets cannot be capitalised. Hence $5 million needs to be charged to profit or loss to undo the reversal. The objective of IAS 38 is to prescribe the accounting treatment for intangible assets that are not dealt with specifically in another Standard. Answer The following assets are tested for impairment under IAS 36: Goodwill 300, Intangible assets 750, Buildings 500, Machines 100, Total fixed assets 1,650, Question 2 Well NV owns an oil rig that has a carrying value of EUR 100 million. Although you need not be a member to ask questions or provide answers, we invite you to register an account and be a member of our community for mutual help. Some questions in this exercise may have more than one correct answer. Road Map on IAS 38 1. – accounting for the different types of intangible asset acquired in a business combination; – the choice of accounting policy of cost or revaluation models, allowed under IAS 38 Intangible Assets for intangible assets; – the capitalisation of development expenditure. Become a Financial Reporting Faculty member. Thus, when changes in circumstances indicate that the book value of the intangibles may not be reconcilable (i.e., fair value of intangible < carrying amount), a write-down should be performed to recognize the loss. Impairment 9. Prepare brief notes for the directors of Wentworth plc to answer the following points: (a) What is the definition of an intangible asset?" Recognition of expense 4. (a) Expenditure during the research phase of a project may sometimes be capitalised as an intangible asset (b) Expenditure during the development phase of a project may sometimes be … Some of them disagreed with removing the context about the analysis of IAS 38 vs. IFRS 16 because it is important for readers to understand how IFRS 16 and IAS 38 interact with each other. Intangible assets Topic summary provided by PwC, giving latest developments and overview, a summary of … If you’re studying IAS 38 Intangible Assets, why not test your knowledge with our multiple choice quiz? It defines intangible asset as an identifiable non-monetary asset without physical substance. Internally generated brands are often cited as the big example here, prohibiting entities from recognising items, due to their subjective and fluctuating nature. An intangible asset is an identifiable non‐monetary asset of the entity without physical substance. Which of the following is an objective of IAS 38? IAS 38 Intangible Assets outlines the accounting requirements for intangible assets, which are non-monetary assets which are without physical substance and identifiable (either being separable or arising from contractual or other legal rights). IAS 38 Intangible Assets outlines the accounting requirements for intangible assets, which are non-monetary assets which are without physical substance and identifiable (either being separable or arising from contractual or other legal rights). To prescribe the accounting treatment for intangible assets that are dealt with specifically in another Standard To specify how to measure … •You will have multiple attempts at the quiz. (i) No intangible asset arising from research shall be recognized. Intangible assets with indefinite useful lives 8. Useful life 6. Under this standard, raw data would be unlikely to meet the definition of a recognisable asset. Earned Point(s): 0 of 0, (0) Phone: +353 (0)1 4433 400 Total impairment is still $3 million. The standard also prescribes the subsequent accounting treatment of intangible assets that satisfy the recognition criteria and are recognized in the statement of financial position. Question 18. ACCA FR Chapter 6 Intangible assets (IAS 38) Questions - Practice Questions - Chapter 6 Free ACCA Financial Reporting (FR) Tests. Scope It specifies 2 recognition criteria: It is a resource controlled by the entity; and ; Future economic benefits are expected from the asset. •Professional Development will monitor quiz results and follow up with anyone who does not achieve a score of at least 8/10. INSTRUCTIONS: •Answer all questions on the quiz before submitting •A result of 8/10 is required in order to consider this complete. Intangible assets, other than goodwill, acquired as part of an on-going business or acquired separately: a) Should be never amortised b) Should be amortised systematically over its estimated useful life This site uses cookies. 1 All capitalised development expenditure must be amortised. As mentioned earlier, IAS 38 provides application guidance for separate acquisition of intangible assets (IAS 38.25-32) and acquisition as part of a business combination (IAS 38.33-37). Data sets are an intangible asset and would therefore be covered by IAS 38 Intangible Assets. To sum up, each intangible asset has 3 main characteristics: It … An intangible asset with a finite useful life is tested for impairment annually. •You will have multiple attempts at the quiz. Retirements and disposals. IAS 38 Intangible asset 1 / 4 Question 4b - December 2018 You are the financial controller of Omega, a listed entity which prepares consolidated financial statements in accordance with International Financial Reporting Standards (IFRS® Standards). Intangible assets with finite useful lives 7. Revised March 2004. A long held principle of IAS 38 is that the majority of internally generated intangible assets cannot be capitalised. Example 2: Bad and doubtful debts. Results are being recorded. (7 marks) IAS 38 deals with many types of intangible assets including training costs, costs for advertising, start-ups, R&D and many more. Although you need not be a member to ask questions or provide answers, we invite you to register an account and be a member of our community for mutual help. The standard also prescribes the subsequent accounting treatment of intangible assets that satisfy the recognition criteria and are recognised in the statement of financial position. Become a Financial Reporting Faculty member. And, IAS 38 expands this definition for intangible assets by specifying that on top of basic definition, an intangible asset is an identifiable non-monetary asset without physical substance. Judgement is needed to tell whether such intangible assets should be accounted for under IAS 38 or IAS 16. is capable of being separated or divided from the entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, identifiable asset or liability, regardless Required: According to IAS 38 - 'Intangible assets', which of the following statement (s) is (are) true? Question 1 of 4 Which of the following is an objective of IAS 38? In accordance with IAS 38 Intangible Assets, which of the following statements regarding the accounting treatment of an intangible asset is correct? IAS 38 covers the definition and recognition criteria for Intangible Assets. IAS 38 Intangible assets gives guidance on the accounting treatment for intangible assets that are not dealt with specifically in another standard. IAS 38 Intangible assets If expenditure on an intangible item was initially recorded as an expense, in previous interim, or annual financial statements, IAS 38 prohibits the undertaking from recording this expenditure as part of the cost of an asset at a later date. An asset is identifiable if either: it is separable (that is, it is capable of being separated or divided from the entity and sold, transferred, licensed, rented or exchanged); or it arises from contractual or legal rights. Also, explain how the criteria is applied to the recognition of separately purchased intangible assets, intangible assets acquired in a business combination and internally generated intangible assets. Standard IAS 38 Intangible assets gives answers to these questions and provides guidance on intangibles assets’ issues. It specifies 2 recognition criteria: It is a resource controlled by the entity; and ; Future economic benefits are expected from the asset. Intangible assets meeting the relevant recognition criteria are initially measured at cost, subsequently measured at cost or using the revaluation model, and … IAS 38 Intangible Assets Last updated: March 2017 RECOGNITION AND INITIAL MEASUREMENT This communication contains a general overview of the topic and is current as of March 31, 2017. Data sets are an intangible asset and would therefore be covered by IAS 38 Intangible Assets. Bookmark File PDF Ias 38 Question Bank And Solution IAS 38 Intangible Assets Quiz Practice with IAS Civil Services exam Question bank and MCQ’s for pre and mains prepared by subject experts. Recognition of intangible assets. Non-current Assets: Property, plant and equipment Right of use… Terms & Conditions 2011 IFRS: IAS 38 Intangible Assets. It requires an entity to recognize an intangible asset upon fulfillment of certain recognition criteria. Standard IAS 38 Intangible assets gives answers to these questions and provides guidance on intangibles assets’ issues. REVIEW TESST Question 1 0 out of 2 points IAS 38 Intangible Assets governs the accounting treatment of expenditure on research and development. ... Hello, I’ve a question regarding question 1 in this practice test (intangible assets ch.6). The results of the survey will only be accessible by Deloitte and your personal details will not be disclosed. The objective of IAS 38 is to prescribe the accounting treatment for intangible assets that are not dealt with specifically in another Standard. The cost of a separately acquired intangible asset can usually be measured reliably (IAS 38.26). 2 million in the financial statements for the year ended 31 March 2014. Currently studying for my AAT Level 4 Financial Statements exam, in a practice paper I have come across this question; "The directors of Wentworth plc are reviewing their assets under IAS 38, Intangible Assets. The results of the survey will only be accessible by Deloitte and your personal details will not be disclosed. IAS 38 deals with many types of intangible assets including training costs, costs for advertising, start-ups, R&D and many more. Read IAS 38 Intangible Assets and Chapter 11 of Wiley IFRS 2019 and answer the following guide questions: 1. If an asset incorporates both intangible and tangible elements, it shall be treated under __________. The application of the principles addressed will depend upon the particular facts and circumstances of each individual case. (6 marks). Accordingly, Click here to take the IAS 38 Quiz. Download PDF in Hindi also. Total impairment is still $3 million. E-mail: info@charterededucation.com. Students who practice questions generally learn more effectively than those who don’t. answered Jan 10, 2016 in IAS 38 - Intangible Assets by Visio Level 5 Member … ANSWER –QUESTION 7: IAS 38 INTANGIBLE ASSETS Part (a) Following are the criteria that should be used while recognizing intangible assets from research and development work. Your participation in the survey is optional and you may refuse to answer any specific question or exit the entire survey at any time. Revised March 2004. To sum up, each intangible asset has 3 main characteristics: It is controlled … The standard also specifies how to measure the carrying amount of intangible assets and requires specified disclosures about intangible assets. The UK government follows IAS 38 as adapted for the public sector. Not define an “ asset ” you ’ re studying IAS 38 intangible assets that ias 38 intangible assets questions and answers not specifically covered in... 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