GAAP Self-Test Questions

1. All of the following are key similarities between U.S. GAAP and IFRS with respect to accounting for intangible assets except:

for accounting purposes, costs associated with research and development activities are segregated into the two components. the accounting for intangibles acquired in a business combination. recovery of impairments on intangibles other than goodwill. the accounting for impairments of assets held for disposal.

2. Research and development costs are:

expensed under U.S. GAAP. expensed under IFRS. expensed under both U.S. GAAP and IFRS. None of the answer choices is correct.

3. Which of the following statements is correct?

Both IFRS and U.S. GAAP permit revaluation of property, plant, and equipment and intangible assets (except for goodwill). U.S. GAAP permits capitalization of development costs. IFRS requires capitalization of research and development costs once economic viability is met. IFRS requires capitalization of development costs once economic viability is met.

4. A loss on impairment of an intangible asset under U.S. GAAP is the assets:

carrying amount less the expected future net cash flows. carrying amount less its recoverable amount. recoverable amount less the expected future net cash flows. carrying value less its fair value.

5. Recovery of impairment is recognized under U.S. GAAP for all the following except:

patent held for use. trademark. goodwill.

None of the answer choices is correct; impairment reversals are not allowed under U.S. GAAP.