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Which of the following statements about intangible assets are correct?
1 If certain criteria are met, research expenditure must be recognised as an intangible asset.
2 The notes to the financial statements should disclose the gross carrying amount and the
accumulated amortisation at the beginning and the end of the period for each class of intangible
asset.
3 Intangible assets must be amortised over their useful life.
A 2 and 3 only
B 1 and 3 only
C 1 and 2 only
D All three statements are correct.Hello tutor. In this question, I think (3) is not really correct as intangible with indefinite useful life is only tested for impairment but not amortised, so a Must here is not correct, isn’t it?
The answer for this question is A.
Hi,
Where are you getting this question from? The answer looks wrong as I think that 1 and 2 are correct. We must capitalise the research costs when we meet the criteria, hence 1 is correct. We only amortise if it has a useful life as you say, and if no useful life then it is amortised. I think therefore that it should be C as the correct answer.
Thanks
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