IAS 38 States That an Intangible Asset Is Deemed to Have

question 38

Multiple Choice

IAS 38 states that an intangible asset is deemed to have an indefinite life when there is no foreseeable end to the expected cash flows the asset is likely to generate. What is the impact of an indefinite life on amortization of the intangible asset's cost under IAS 38?

• A) Management may choose any number of years over which to amortize the cost.
• B) No amortization is taken as long as the life is considered indefinite.
• C) The cost of the asset should be amortized over 20 years.
• D) The cost of the asset should be expensed in the period the intangible asset is acquired.

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Definitions:

Unionization

The process by which workers form or join a union to collectively negotiate with their employer regarding wages, working conditions, and other employment terms.

Intimidation

The act of threatening or coercing someone into doing or not doing something, often used in contexts of labor disputes or competitions to unduly influence parties.

CIO

Congress of Industrial Organizations, a federation of unions that organized workers in industrial unions in the United States and Canada from 1935 to 1955.

Mass Production Workers

Employees involved in large-scale manufacturing processes, often characterized by standardized production methods and repetitive tasks.