Financial Reporting (FR) Mar / June 2021 Examiner’s report
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- Điều hướng trang này:
- What is the correct answer The correct answer is C – 2 and 3 only
| Question 5
During the year ended 31 March 20X8, Wilrob Co incurred the following costs: (1) $400,000 in staff costs incurred in updating a computerised record of potential customers (2) $800,000 for the purchase of a domain name for the website of a company making substantial online sales (3) $4m for a patent purchased to improve the production process, with an expected useful life of three years Which of the above costs would be capitalised as intangible assets in accordance with IAS 38 Intangible Assets? Options: A. 1 only B. 3 only C. 2 and 3 only D. 1, 2 and 3 Examiner’s report – FR March/June 2021 15 What is the correct answer? The correct answer is C – 2 and 3 only. An intangible asset can be recognised when it meets: 1. the definition of an intangible asset; and 2. the recognition criteria. An intangible asset is an identifiable non-monetary asset without physical substance. An intangible asset can only be recognised if it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost of the asset can be measured reliably. Both the domain name and the patent meet the definition of being intangible assets and the cost of each can clearly be measured reliably. Based on the information available, it appears that economic benefits will flow to the entity through revenue from online sales (domain name) and production cost savings (patent). Internally generated customer lists are specifically excluded by IAS 38 from being recognised as intangible assets (along with other items such as internally generated brands). This is because any expenditure incurred on such items cannot be distinguished from the cost of developing the business as a whole. tải về 0.8 Mb. Chia sẻ với bạn bè của bạn:
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