TRUE OR FALSE: Write the word TRUE if the statement is correct, otherwise write "FALSE". 15 Items.

1. Development involves application of research finding. 2. Expenditure during the research phase of a project may sometimes be capitalized as an intangible asset. 3. Training costs of technicians used in research can be capitalized. 4. Systematic and Rational Allocation is the principle that best describes the current method of accounting for research and development cost. 5. As a rule, computer software is classified as an intangible asset. 6. Computer software purchased for resale shall be treated as inventory. 7. A computer software purchased as an integral part of a computer-controlled machine tool that cannot operate without the specific software shall be treated as an intangible asset. 8. As one of the criteria of development expenditures in order to qualify them for capitalization is that the entity must reasonably identify the research cost incurred to bring the project to economic feasibility. 9. Design, construction and testing of preproduction prototype and model are under research activities. 10. Laboratory activities aimed at obtaining new knowledge are under research activities. Paint Co. is testing its CGU A for impairment. The CGU's carrying amount is P20., including an allocated goodwill of P4. Paint Co. computes value in use (VIU) of P18 and determines a fair value less costs of disposal (FVLCD) of P17. 11. The impairment loss recognized on CGU is P3. 12. The impairment loss allocated to the goodwill in CGU A is equal to the amount of impairment loss multiplied by 4/20. Silence Co. is determining the VIU of its asset with carrying amount of P500 for purposes of impairment testing. Silence Co. determines that the asset will generate net cash flows of approximately P100 per year in the next 5 years. After that, the asset would be sold for P20. The appropriate discount rate is 6%. The PV of ordinary annuity is 4.2 while the PV of 1 is 0.75. The FVLCD is P410. 13. The recoverable amount is P420. 14. The value in use is P435. 15. The impairment loss is P65