Wiley Plus Questions on Intangible Assets – Flashcards
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Intangible assets are normally classified as current assets.
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False
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Which is not a characteristic of intangible assets?
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They are all subject to amortization.
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Expensing all R&D costs associated with internally created intangible assets results in:
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Understating assets and overstating expenses.
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All of the following are factors to be considered in determining a limited-life intangible asset's useful life:
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The expected useful life of any related asset, the effects of obsolescence, and any legal provisions that may limit the useful life.
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A purchased limited-life intangible asset ______ amortized and is impairment tested using _______________.
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is; the recoverability test and then the fair value test.
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Construction permits are:
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contract-related intangible assets.
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Which of the following is not one of the major categories of intangibles?
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Financing-related.
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Marketing-related intangibles would include:
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a brand name.
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The difference between the price paid to acquire another company and the fair market value of that company's net assets can be referred to as:
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a gap filler.
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The two principal types of patents issued by the U.S. Patent and Trademark Office are:
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process patents and product patents.
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Which of the following costs of goodwill should be amortized over their estimated useful lives?
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Neither goodwill purchased or developed internally is amortized.
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St. Sebastian Company and A. Jamison Company were combined in a purchase transaction. St. Sebastian was able to acquire Jamison at a bargain price. The fair market value of Jamison's net assets exceeded the price paid by St. Sebastian to acquire the company. Proper accounting treatment by St. Sebastian is to report the excess fair value over purchase price as:
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a gain.
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Impairment testing is performed in the same way for indefinite-life intangibles and limited-life intangibles.
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False
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The impairment rule for goodwill involves how many steps?
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There are two steps: first, compare the fair value of the company to its carrying value including goodwill; and second, compare the implied fair value of the goodwill to its carrying value.
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Which of the following principles best describes the current method of accounting for research and development costs?
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Immediate recognition as an expense.
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Which of the following research and development costs may be capitalized?
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Research and development equipment to be used on current and future projects.
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The presentation of intangible assets in the financial statements:
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The presentation of intangibles in the financial statement includes reporting R&D expense in the income statement, crediting amortization directly to the intangible asset account, and disclosing amortization expense for the next 5 years.
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All of the following statements regarding IFRS accounting treatments for intangibles are true except:
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Under IFRS, costs in the development phase of R & D costs are expensed once technological feasibility is achieved.
