In Order to Determine Whether or Not Expenditure Should Be

question 54

Multiple Choice

In order to determine whether or not expenditure should be treated as an intangible asset,the relevant test to apply in Australia is:

• A) It should be recognised when (a) it is definite that future economic benefits will eventuate or (b) the asset possesses a cost or other value that can be measured reliably.
• B) It should be recognised if (a) the expenditure is with an external party in an arm's length transaction for a separately identifiable intangible asset or (b) the intangible asset arises as the difference between the net tangible assets of an entity and the price paid for that entity.
• C) It should be recognised if (a) it is part of a specified plan by management to develop and maintain a separately identifiable asset or (b) the intangible asset was purchased in an arm's length transaction and is actively traded in a market.
• D) It should be recognised when and only when (a) it is probable that future economic benefits will eventuate and (b) the asset possesses a cost or other value that can be measured reliably.
• E) None of the given answers.

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Definitions:

Economic Problem

When we have limited resources available to fulfill society’s relatively limitless wants.

Unemployment

The situation in which individuals who are capable of working and actively seeking employment are unable to find a job.

Inflation

A rise in the general level of prices of goods and services in an economy over a period of time.

Debt to GDP Ratio

A measure of a country's debt compared to its Gross Domestic Product, indicative of the country's ability to pay back its debt.