Under IFRS, Many Intangible Assets Are Expensed Instead of Capitalized

question 56

Multiple Choice

Under IFRS, many intangible assets are expensed instead of capitalized.What is the effect on the future years of expensing intangible assets on the following ratios?
$\begin{array}{ll}&\text { Profit } & \text { Debt-to } \\&\text { Margin } & \text { Assets }\\\hlineA.&\text { Overstated } & \text { Overstated } \\B.&\text { Overstated } & \text { Understated } \\C.&\text { Understated } & \text { Overstated } \\D.&\text { Understated } & \text { Understated }\end{array}$

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Articles of Incorporation

Legal documents filed with a state government to legally establish a corporation.

Shareholder Approval

The process by which shareholders vote to approve or reject proposed actions by a corporation, often required for major decisions or changes.

Corporate Assets

Resources or valuables owned by a corporation, which can include cash, equipment, property, and intellectual property.

Shareholders

Individuals or entities that own shares in a corporation, giving them certain rights such as voting on corporate matters and receiving dividends.