Flashcards
Intangible Non-Current Assets
Cards in this deck (10)
- 1An Intangible asset has four characteristics, which are ...Identifiable
Non-Monetary
No Physical Substance
Capable of providing benefit > 1 year - 2For an intangible asset to be recognised on the Statement of Financial Position, it must meet what criteria?Identifiable - i.e. can be sold/transferred/exchanged by itself
Rights - must arise from contractual or other legal rights
Benefits - should be probable that future economic benefit will flow into owning entity through use of asset
Measurement - cost can be reliably measured - 3If the four criteria for recognition cannot be met, how are associated costs recognised?Expensed through the SPL in year they are incurred
- 4Research costs are ... and must be [capitalised/expensed] due to their ...Research is the original and planned investigation undertaken to gain new scientific or technical knowledge
Costs associated with this must be expensed due to very low chance of return of research - 5Development costs are ...Costs relating to Development, which is defined as the application of research/knowledge to produce a new/improved material, product or service before the start of commercial use (i.e. manufacture)
- 6Intangible assets must be recognised if what criteria is met?Technically feasible to complete asset so that it can be sold
Intention and ability to use/sell asset
Will generate future economic benefit
Adequate resources to complete the asset
Expenditure attributable to development can be reliably measured - 7If Development costs satisfy the requirement to recognise an intangible assets, the costs must be ... else they must be...If Development costs satisfy the requirement to recognise an intangible assets, the costs must be capitalised else they must be expensed
- 8Intangible assets with finite useful lives are ... over their useful lives.Intangible assets with finite useful lives are amortised over their useful lives.
- 9Intangible assets with infinite useful lives are subject to ...... an annual impairment test to revalue at fair value
- 10Why is it rare that Intangible assets are revalued?A homogenous market with willing buyers (found at any time) with public available prices must be present.
Intangible assets tend to be unique (therefore no homogenous market)
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- Bachelors Degree Introduction to Accounting (Unit 2 - Accounting for Limited Companies) Flashcards on Intangible Non-Current Assets, created by Jorden Allcock on 24/02/2016.
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- Jorden Allcock
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