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Wiley IFRS: Practical Implementation Guide and Workbook
MULTIPLE-CHOICE QUESTIONS
1.
A newly set up dot-com entity has engaged you
as its financial advisor. The entity has recently com–
pleted one of its highly publicized research and de–
velopment projects and seeks your advice on the
accuracy of the following statements made by one of
its stakeholders. Which one is it?
(a) Costs incurred during the "research phase"
can be capitali zed.
(b) Costs incurred during the "development
phase" can be capitalized if criteria such as
technical feasibility of the project being es–
tablished are met.
(c) Training costs of technician s used in re–
search can be capitali zed.
(d) Designing of jig s and tools qualify as re–
search activitie s.
Answer: (b)
2. Which item listed below does
not
qualify as an
intangible asset?
(a) Computer software.
(b) Registered patent.
(c) Copyrights that are protected .
(d) Notebook computer.
Answer: (d)
3.
Which of the following items qualify as an intan–
gible asset under lAS 38?
(a) Advertisin g and promoti on on the launch of
a huge product.
(b) College tuition fees paid to employee s who
decide to enroll in an executive M.B.A. pro–
gram at Harvard University while working
with the company.
(c) Operating losses during the initial stages of
the project.
(d) Legal costs paid to intellectual propert y law–
yers to register a patent.
Answer: (d)
4. Once recognized, intangible assets can be carried
at
(a) Cost less accumulated depreciation .
(b) Cost less accumulated depreciation and less
accumulated amortization.
(c) Revalued amount less accumulated de–
preciation .
(d) Cost plus a notional increase in fair value
since the intangible asset is acquired.
Answer: (b)
5. Which of the following disclosures is
not
required by lAS 38?
(a) Useful lives of the intangible assets.
(b) Reconciliation of carrying amount at the be–
ginning and the end of the year.
(c) Contractual commitments for the acquisition
of intangible assets.
(d) Fair value of similar intangible assets used
by its competitors.
Answer: (d)