Under IAS 38/AASB 138, Which Statement Concerning Internally Generated Intangible

question 5

Multiple Choice

Under IAS 38/AASB 138, which statement concerning internally generated intangible assets is incorrect?

• A) They can only be recognised if their cost can be measured reliably.
• B) If patents and copyrights are deemed to be in the research phase all expenditure incurred should be expensed rather than capitalised.
• C) It is likely that the cost of internally generated brand names, mastheads and customer lists can be measured reliably.
• D) The tests for recognising internally generated intangibles are more stringent than for recognising internally generated property, plant and equipment.

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Definitions:

Utility Function

A mathematical representation that assigns a numerical value to each possible outcome or bundle of goods, indicating the level of satisfaction or utility derived.

Gross Demand

The total amount of a product or service that consumers and organizations wish to buy at any given price level before taking into account external factors.

Endowment

An endowment refers to the total assets, both financial and non-financial, owned by an individual or institution, often used to generate income or donations.

Price Ratio

The proportional relationship between two or more prices, indicating the relative cost of goods or services.