Which of the Following Statements Is NOT Correct

question 9

Multiple Choice

Which of the following statements is NOT correct?

• A) intangible assets are to be derecognised on disposal;
• B) amortisation of an intangible with a finite useful life ceases when the asset becomes temporarily idle;
• C) intangible assets are to be derecognised when there are no expected future benefits from the asset;
• D) gains or losses on disposal are calculated as the difference between the proceeds on disposal and the carrying amount at point of sale, with amortisation calculated up to the point of sale.

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Definitions:

Acquisition Differential

The difference between the acquisition cost of an entity and the fair value of its net identifiable assets at the time of acquisition.

Land Account

An account on a company's balance sheet that represents the cost of land owned by the company without any depreciation applied, since land is considered to have an unlimited useful life.

Investment Account

An account held at a financial institution for the purpose of managing securities, such as stocks and bonds, for investment purposes.

Equity Method

An accounting technique used to record investments in other companies, where the investment is initially recorded at cost and adjusted over time for the investor's share of the investee's net profits or losses.