Question 1

A public company is creating an internally generated intangible asset and has entered the development phase of the project (by meeting all six development phase criteria).

Which of the following costs can be capitalized as an intangible asset?

Question 1 options:

A-A general overhead cost allocation from head office

B-Training costs to teach staff how to operate the asset

C-Costs incurred to design and construct a prototype

D-Costs incurred during the research phase of the project

Question 2

Which of the following statements correctly describes the subsequent measurement of intangible assets under IFRS?

Question 2 options:

A-All intangible assets must be subsequently measured using the cost model.

B-The value of intangible assets with an infinite life does not change until the asset is sold.

C-Impairment is recorded on intangible assets that are not able to be sold.

D-Intangible assets with a finite life are amortized over their useful life.

Question 3

Under IFRS, which of the following costs may be capitalized as intangible assets?

Question 3 options:

A-Overhead costs directly related to development activities

B-Internally generated goodwill

C-Borrowing costs related to research activities

D-Internally developed brands

Question 4

Which of the following correctly describes impairment of goodwill under IFRS?

Question 4 options:

A-Impairment of goodwill may be reversed to its original carrying value in the future if the entity determines the recoverable amount has increased.

B-Impairment loss on goodwill is recognized if the carrying amount is less than the recoverable amount.

C-Goodwill must be assigned to a cash generating unit to be tested for impairment.

D-Goodwill must be tested at least every two years for impairment, or when there are indicators of impairment.

Question 5

Public company Rainy Day Ltd. (RDL) purchased a trademark on April 1, 2015, for $50,000. On December 31, 2020, RDLs year end, the trademark had a carrying value of $40,000. On this day, RDL determined that there were indications that the trademark may be impaired. RDL has estimated that the trademark could be sold for $25,000, net of disposal costs. The value in use of the trademark is $31,000.

According to IAS 36, what is the impairment loss to be recorded on the trademark on December 31, 2020?

Question 5 options:

A-$0

B-$9,000

C-$15,000

D-$19,000