Ch14 TB Rankin
Ch14 TB Rankin
Ch14 TB Rankin
to accompany
Contemporary Issues in
Accounting
Prepared by
Matt Tilling
*a. Exceeds its book value because certain assets are not recognised under
accounting rules
b. Appears to be random distributed with regards to book value
c. Is less than its book value because certain assets are not recognised under
accounting rules
d. None of the above
Correct answer: a
Learning Objective 14.1 ~ Analyse the background leading to the issue of whether intangible
assets and heritage assets should be recognised in financial statements
2. Historically internally generated intangible assets have not been recognised in the
financial statements for what reason?
Correct answer: c
Learning Objective 14.2 ~ Explain why capitalisation is contentious and apply the asset
definition and recognition tests of the Conceptual Framework
a. Control
*b. Seperability
c. Future economic benefit
d. None of the above, i.e. they are all part of the definition
Correct answer: b
Learning Objective 14.2 ~ Explain why capitalisation is contentious and apply the asset
definition and recognition tests of the Conceptual Framework
a. Tangibility
b. Ownership
c. Existence of a market for the asset
*d. None of the above
Correct answer: d
Learning Objective 14.2 ~ Explain why capitalisation is contentious and apply the asset
definition and recognition tests of the Conceptual Framework
5. Which of the following is NOT a criticism that has been levelled at the current
definition of an asset under the Conceptual Framework?
Correct answer: c
Learning Objective 14.2 ~ Explain why capitalisation is contentious and apply the asset
definition and recognition tests of the Conceptual Framework
6. Which of the following is NOT a feature of intangibles that differentiates them from
other assets?
Correct answer: d
Learning Objective 14.3 ~ Analyse whether intangibles pass the definition and recognition
tests
7. Which of the following in NOT part of the AASB 138 definition of an intangible
asset?
a. Non-monetary
*b. Unidentifiable
c. Controlled
d. None of the above, i.e. they are all part of the definition
Correct answer: b
Learning Objective 14.3 ~ Analyse whether intangibles pass the definition and recognition
tests
a. Mastheads
b. Customer lists
c. Registered brand names
*d. None of the above
Correct answer: d
Learning Objective 14.3 ~ Analyse whether intangibles pass the definition and recognition
tests
Correct answer: c
Learning Objective 14.4 ~ Explain the implications of non-recognition of intangibles
10. Internally generated goodwill is not accounted for because it is difficult to:
a. Identify
b. Measure
c. Isolate
*d. All of the above
Correct answer: d
Learning Objective 14.4 ~ Explain the implications of non-recognition of intangibles
a. At fair value
b. As the balancing item between the fair value of assets and their carrying
amount
*c. As the balancing item between purchase consideration and the fair value of
identifiable net assets acquired
d. At historic cost
Correct answer: c
Learning Objective 14.4 ~ Explain the implications of non-recognition of intangibles
12. It has been argued that when it comes to intangible assets capital markets would be
better served by:
Correct answer: c
Learning Objective 14.4 ~ Explain the implications of non-recognition of intangibles
13. Lev has suggested that by not including internally generated intangible assets
companies book values may be understated by as much as:
a. 100%
*b. 75%
c. 50%
d. 25%
Correct answer: b
Learning Objective 14.4 ~ Explain the implications of non-recognition of intangibles
14. Which of the following is NOT part of the definition of a heritage asset?
*a. Intangible
b. Of historic, artistic, scientific etc. value
c. Held and maintained for its contribution to knowledge and culture
d. None of the above, i.e. they are all part of the definition
Correct answer: a
Learning Objective 14.5 ~ Analyse whether heritage assets pass the definition and
recognition tests
a. Stonehenge
*b. Aboriginal oral history
c. The Great Barrier Reef
d. None of the above, i.e. they are all heritage assets
Correct answer: b
Learning Objective 14.5 ~ Analyse whether heritage assets pass the definition and
recognition tests
16. Which part of the Conceptual Framework definition of an asset makes recognition of
Heritage Assets difficult?
Correct answer: d
Learning Objective 14.5 ~ Analyse whether heritage assets pass the definition and
recognition tests
17. Which part of the Conceptual Framework definition of a liability makes it unlikely
that Heritage Assets should be recognised as liabilities?
Correct answer: b
Learning Objective 14.5 ~ Analyse whether heritage assets pass the definition and
recognition tests
18. Which of following methods have NOT been proposed to measure the value of
Heritage Assets?
Correct answer: d
Learning Objective 14.5 ~ Analyse whether heritage assets pass the definition and
recognition tests
19. One important question regarding the recognition of Heritage Assets is whether they
fall within SAC 2. Which of the following questions would address this concern?
Correct answer: c
Learning Objective 14.6 ~ Explain the implications of recognition of heritage assets.
20. Which objective of financial accounting most closely aligns with the concept of
Heritage Assets?
*a. Stewardship
b. Corporate governance
c. Decision usefulness
d. Financial valuation
Correct answer: a
Learning Objective 14.6 ~ Explain the implications of recognition of heritage assets.