What Is an Example of Deferred Acquisition Costs and How

question 22

Multiple Choice

What is an example of deferred acquisition costs and how does AASB 1023 require them to be treated?

• A) They include commission or brokerage paid to agents to attract business. They should be deferred as an asset and systematically amortised over the period of expected benefit.
• B) They include brokerage and legal fees paid in advance of the purchase of land. They should be deferred and included in the cost of the land.
• C) They include the purchase of client lists and policy details from agents. They should be capitalised as an intangible asset and revalued at balance date.
• D) They include brokerage and legal fees paid in advance of the purchase of land. They should be deferred and included in the cost of the land and they include the purchase of client lists and policy details from agents. They should be capitalised as an intangible asset and revalued at balance date.
• E) All of the given answers.

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Definitions:

Connective

A type of tissue in the body that supports, binds together, or separates other tissues and organs.

Epithelial Cell Surfaces

The outer layers of cells that line the surfaces and cavities of organs, vessels, and the body, serving as a protective barrier.

Folded Surfaces

Structures in biological systems that have been folded to increase their surface area, enhancing their capacity for processes such as absorption or secretion.

Microvilli

Tiny, finger-like protrusions on the surface of some epithelial cells that increase surface area for absorption and secretion.