Under IAS 38 Intangibles, Goodwill May Only Be Recognised as an Asset

question 20

Multiple Choice

Under IAS 38 Intangibles, goodwill may only be recognised as an asset if it:

• A) arises as a result of creating new assets within the normal business operations;
• B) does not exceed its internally recorded cost;
• C) is internally generated;
• D) is acquired as part of a business combination.

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Definitions:

Stroop Effect

A demonstration of cognitive interference where a delay in the reaction time of a task occurs due to a mismatch between the name of a color (e.g., "red," "blue") and the color it is printed in.

Heuristics

Mental shortcuts or rules of thumb that simplify decision making, sometimes at the cost of accuracy or completeness.

Sunk Cost Effect

This is the economic concept that people are likely to continue an endeavor if they have already invested time, effort, or money into it, regardless of the current costs or benefits.

Prototype

A prototype is an early sample, model, or release of a product built to test a concept or process.