USGAAP and IFRS Require Firms to Recognize as Assets Identifiable

question 147

Multiple Choice

U.S.GAAP and IFRS require firms to recognize as assets identifiable intangibles acquired in external market transactions. Which of the following is/are true?

• A)The exchange between an independent buyer and seller provides evidence of the existence of expected future benefits, and the exchange price provides evidence of the fair value of those benefits.
• B)In external market transactions, identifiable intangibles include patents, trademarks, customer lists, and other economic resources ready for use, as well as in-process technologies with uncertain future benefits.
• C)In external market transactions, identifiable intangible assets have either finite lives or indefinite lives.
• D)In external market transactions, firms must amortize intangible assets with finite lives, generally using the straight-line method.
• E)all of the above

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Definitions:

S & L Debacle

Refers to the financial crisis involving Savings and Loan associations in the United States during the 1980s, leading to significant regulatory changes and economic impacts.

Transaction Motive

The need to hold money for the purpose of conducting everyday transactions.

Precautionary Cash

Funds held by individuals or firms to deal with unexpected events or emergencies, providing a buffer against financial issues.

Credit Availability

The ease with which individuals or companies can obtain loans or other forms of credit from financial institutions.