When a Patent or Trademark Is Acquired in a Business

question 15

Multiple Choice

When a patent or trademark is acquired in a business combination, what does IAS 38 say about recording these intangibles?

• A) If they had not been previously recorded as separate assets by the acquired company, they should always be recorded as "Goodwill" on the balance sheet of the company acquiring them.
• B) The cost of the intangibles should be expensed by the acquiring company on the merger date.
• C) They should be recorded as separate intangible assets only if their useful life is indefinite.
• D) They should be recorded as separate intangible assets if their fair value can be reliably measured.

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Definitions:

Deeply Embedded

A term used to describe something that is firmly and deeply ingrained or established within a particular context or environment.

Social Cause

A societal issue or cause that individuals or organizations actively work to address or support, often to promote change.

Brand Purpose

The underlying intent behind a brand that goes beyond selling products or services, often related to societal impact or values.

Higher-Order Motive

Psychological needs that go beyond basic physical needs, focusing on personal growth and fulfillment.