•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. Measurement after recognition 5. To prescribe the accounting treatment for intangible assets that are dealt with specifically in another Standard To specify how to measure … Intangible assets meeting the relevant recognition criteria are initially measured at cost, subsequently measured at cost or using the revaluation model, and … When can you recognise an IA and for how much. 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. Useful life 6. According to IAS 38 - 'Intangible assets', which of the following statement (s) is (are) true? Hence you can not start it again. In accordance with IAS 38 Intangible Assets, which of the following statements regarding the accounting treatment of an intangible asset is correct? 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. (i) No intangible asset arising from research shall be recognized. 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 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. Required: To sum up, each intangible asset has 3 main characteristics: It … Prepare brief notes for the directors of Wentworth plc to answer the following points: (a) What is the definition of an intangible 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 – 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 cost of a separately acquired intangible asset can usually be measured reliably (IAS 38.26). One final question: would I be right in thinking that, as with property, plant and equipment, we can use the fair value model to measure intangible assets? IAS 38 deals with many types of intangible assets including training costs, costs for advertising, start-ups, R&D and many more. The results of the survey will only be accessible by Deloitte and your personal details will not be disclosed. Earned Point(s): 0 of 0, (0) An intangible asset is an identifiable non‐monetary asset of the entity without physical substance. Examples include: patents, licenses, & … Our UPSC IAS question bank will cover all important topics such as general studies (GS), CSAT,GAT and optional subjects. This chapter discusses the recognition and measurement of IAS 38 intangible assets. IAS 38 Intangible Assets sets out the recognition criteria, measurement bases and disclosure requirements for intangible assets not dealt with specifically in another standard. Question 1 of 4 Which of the following is an objective of IAS 38? Standard IAS 38 Intangible assets gives answers to these questions and provides guidance on intangibles assets’ issues. Which of the following does not define an “asset”? Question 18. 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. 2 million in the financial statements for the year ended 31 March 2014. Some intangible assets are contained in or on a physical substance. deferred tax assets, goodwill). 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. It requires an entity to recognize an intangible asset upon fulfillment of certain recognition criteria. The general rule is that if an intangible asset is not an integral part of the related hardware, it should be accounted for separately under IAS 38 (IAS 38.4). Example 3: Bad and doubtful debts . Accordingly, Total impairment is still $3 million. Intangible assets with indefinite useful lives 8. Question 18. Download PDF in Hindi also. It specifies 2 recognition criteria: It is a resource controlled by the entity; and ; Future economic benefits are expected from the asset. •You will have multiple attempts at the quiz. Effective 31 March 2004. They acknowledged though that providing the context no longer answers the question after the conclusion in respect of service vs. asset has been reached. Separate acquisition of intangible assets. 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. Welcome to AccountantAnswer Forum, where you can ask questions and receive answers. Impairment of Intangible Assets All principles (IAS 36) apply to impairments of long-lived assets also apply to 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. Become a Financial Reporting Faculty member. 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 REVIEW TESST Question 1 0 out of 2 points IAS 38 Intangible Assets governs the accounting treatment of expenditure on research and development. Define an intangible asset. Intangible assets Topic summary provided by PwC, giving latest developments and overview, a summary of … 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. ACCA FR Chapter 6 Intangible assets (IAS 38) Questions - Practice Questions - Chapter 6 Free ACCA Financial Reporting (FR) Tests. 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. The objective of IAS 38 is to prescribe the accounting treatment for intangible assets that are not dealt with specifically in another Standard. The application of the principles addressed will depend upon the particular facts and circumstances of each individual case. It defines intangible asset as an identifiable non-monetary asset without physical substance. Hence $5 million needs to be charged to profit or loss to undo the reversal. Non-current Assets: Property, plant and equipment Right of use… It requires an entity to recognise an intangible asset if, and only if, specified criteria are met. IAS 38 Intangible Assets prohibits the recognition of internally generated goodwill, thus any reversal of impairment is not recognised. 2011 IFRS: IAS 38 Intangible Assets. If you’re studying IAS 38 Intangible Assets, why not test your knowledge with our multiple choice quiz? IAS 38 Intangible Assets 2017 - 05 2 An asset is identifiable if it is either: (a) separable, i.e. Effective 31 March 2004. An intangible asset is an identifiable non-monetary asset without physical substance. Students who practice questions generally learn more effectively than those who don’t. Examples of intangible assets that are not within the scope of IAS 38 are given in paragraphs IAS 38.2-3 (e.g. 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. The UK government follows IAS 38 as adapted for the public sector. INSTRUCTIONS: •Answer all questions on the quiz before submitting •A result of 8/10 is required in order to consider this complete. This site uses cookies. Under this standard, raw data would be unlikely to meet the definition of a recognisable asset. IAS 38 deals with many types of intangible assets including training costs, costs for advertising, start-ups, R&D and many more. 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. Total impairment is still $3 million. Intangible assets with finite useful lives 7. This Standard requires an entity to recognise an intangible asset if, and only if, specified criteria are met. Which of the following is an objective of IAS 38? A long held principle of IAS 38 is that the majority of internally generated intangible assets cannot be capitalised. In accordance with IAS 38 Intangible Assets, which of the following statements regarding the accounting treatment of an intangible asset is correct? An intangible asset with a finite useful life is tested for impairment annually. 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 without physical substance. 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. To find out more, see our Cookies Policy According to IAS 38 - 'Intangible assets', what is the total cost that can be capitalised as an intangible fixed asset in respect of the new process? The objective of IAS 38 is to prescribe the accounting treatment for intangible assets that are not dealt with specifically in another Standard. 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 Revised March 2004. It defines intangible asset as an identifiable non-monetary asset without physical substance. 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. Impairment 9. 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). Recognition of intangible assets. IAS 38 Intangible assets gives guidance on the accounting treatment for intangible assets that are not dealt with specifically in another standard. 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. The cost of a separately acquired intangible asset can usually be measured reliably (IAS 38.26). (i) No intangible asset arising from research shall be recognized. Retirements and disposals. 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. 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). The results of the survey will only be accessible by Deloitte and your personal details will not be disclosed. 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. 1 All capitalised development expenditure must be amortised. IAS 38 Intangible Assets prohibits the recognition of internally generated goodwill, thus any reversal of impairment is not recognised. (6 marks). You have already completed the quiz before. It requires an entity to recognise an intangible asset if, and only if, specified criteria are met. IAS 38 gives further guidance on all 3 aspects: Identifiability, Control, and ; Future economic benefits. In your discussion, you are required to discuss IAS 38. – 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. IAS 38 gives further guidance on all 3 aspects: Identifiability, Control, and ; Future economic benefits. •Professional Development will monitor quiz results and follow up with anyone who does not achieve a score of at least 8/10. Intangible asset is an identifiable nonmonetary asset … Judgement is needed to tell whether such intangible assets should be accounted for under IAS 38 or IAS 16. If you’d like to keep improving your knowledge of IFRS, sign up for a subscription where you can access all our questions. Articles, Clarence Street, Dun Laoghaire, Co. Dublin, Ireland (7 marks) Recognition of intangible assets. Definition of intangible asset 2. (8 marks) Required: Provide answers to the three queries raised by the chief executive officer. IAS 38 Intangible assets gives guidance on the accounting treatment for intangible assets that are not dealt with specifically in another standard. An intangible asset with an indefinite useful life is tested for impairment when indications exist 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 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? Internally generated brands are often cited as the big example here, prohibiting entities from recognising items, due to their subjective and fluctuating nature. Quiz complete. INSTRUCTIONS: •Answer all questions on the quiz before submitting •A result of 8/10 is required in order to consider this complete. You must sign in or sign up to start the quiz. answered Jan 10, 2016 in IAS 38 - Intangible Assets by Visio Level 5 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. Click here to take the IAS 38 Quiz. Data sets are an intangible asset and would therefore be covered by IAS 38 Intangible Assets. 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). The UK government follows IAS 38 as adapted for the public sector. Thank you for your time. The following statements about the provisions of IAS 38 may or may not be correct. 1 All capitalised development expenditure must be amortised. IAS 38 covers the definition and recognition criteria for Intangible Assets. Phone: +353 (0)1 4433 400 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. Solution for List all the fixed assets and categories them in Tangible and Intangible Assets. Road Map on IAS 38 1. ... Hello, I’ve a question regarding question 1 in this practice test (intangible assets ch.6). A long held principle of IAS 38 is that the majority of internally generated intangible assets cannot be capitalised. 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