Intangible Asset

Satisfactory Essays
Q1 1. an intangible asset should be amortised and written off on a systematic basis over the asset’s economic life

2. internally generated goodwill may be carried in the statement of financial position if the value can be determined with reasonable certainty

3. internally generated brands can never be recognised as intangible assets

Which of the following is consistent with IAS 38 Intangible assets? A 1 and 2 only B 1 and 3 only C 2 only D 3 only
Q2 During 20x7, Research Ltd incurred the following expenditure on research and development activities, none of which related to the cost of non-current assets. 1 £20,000 on investigating methods of separating raw materials into Chemicals A, B and C. 2 After the technical viability of converting chemical B into a new medicine for sensitive teeth had been proved, £150,000 on the conversion process.

Commercial production and sales of the medicine commenced on 1 April 20X7 and are expected to produce steady profitable income over a 10-year period before being replaced. Adequate resources exist to achieve this. No commercial uses have been discovered for chemicals A and C.
What is the maximum amount of development expenditure that can be carried forward at 31 December 20X8 in accordance with IAS 38 Intangible assets? A £123,750 B £129,250 C £138,750 D £144,917
Q3 Which of the following should be included in a company’s statement of financial position as an intangible non-current asset under IAS 38? A payments on account of patents B expenditure on completed research C brands developed by the company D internally-generated goodwill
Q4 Henna plc was incorporated on 1st January 20X6. At 31 December 20X6 the following items had arisen.
1 purchase of laboratory equipment for research purposes £80,000
2 goodwill purchase for valuable consideration £100,000
3 goodwill created by the company £80,000
4 patent purchased £70,000
5 costs incurred in

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