1.

An intangible asset is regarded as having an indefinite useful life when

a. There is a foreseeable limit to the period over which the asset is expected
to generate net cash inflows to the entity.
b. There is no foreseeable limit to the period over which the asset is
expected to generate net cash inflows to the entity.
c. The useful life of the intangible asset arises from legal right.
d. The useful life of the intangible asset arises from contractual right.
2. Which of the following statements is incorrect in relation to trademark?
a. A trademark is an identifiable intangible asset.
b. A trademark can be regarded as an intangible asset with an indefinite
useful life considering the almost automatic renewal of the legal life.
c. A trademark with indefinite life is not amortized but tested for impairment
at least annually and whenever there is an indication of impairment.
d. A trademark with indefinite useful life is amortized and tested for
impairment whenever there is an indication of impairment at the end of the
reporting period.
3. Which of the following statements is true in relation to internally generated
intangible asset?
a. Internally generated goodwill shall not be recognized as an intangible
asset.
b. Internally generated brand, masthead, publishing title, and customer list
shall not be recognized as an intangible asset.
c. The cost of internally generated intangible asset comprises all directly
attributable costs necessary to create, produce and prepare the asset for
the intended use.
d. All of these statements are true.
4. Which of the following statements is true in relation to acquisition of an
intangible asset as part of a business combination?
I. Intangible assets acquired in a business combination shall only be recognized
if the assets have already been recognized by the acquiree.
II. Intangible assets acquired in a business combination shall be recognized
separately from goodwill.
a. I only
b. II only
c. Both I and II
d. Neither I nor II

5. Which intangible asset should be reported as a separate line item in the

statement of financial position?
a.
b.
c.
d.

Franchise
Trademark
Patent
Goodwill

6. The residual value of an intangible asset with a finite useful life shall be
assumed zero, except
a. When there is a commitment by a third party to purchase the asset at the
end of its useful life.
b. When there is an active market for the asset and it is probable that such
market will exist at the end of useful life.
c. When there is a commitment by a third party to purchase the asset at the
end of its useful life or there is an active market for the asset and it is
probable that such market will exist at the end of useful life.
d. There are no exceptions.
7. An entity that acquires an intangible asset may use the revaluation model for
subsequent measurement only when
a.
b.
c.
d.

The cost of the intangible asset can be measure reliably.

An active market exists for the intangible asset.
The intangible asset is a monetary asset.
The useful life of the intangible asset can be reliably determined.

8. Which of the following is true in relation to control by the entity of the

intangible asset?
a. The skill of employees arising out of the benefits of training costs cannot
be recognized as intangible asset.
b. Market share and customer loyalty cannot normally be recognized as
intangible asset because an entity cannot control the action of customers.
c. The capacity of the entity to control the economic benefits from an
intangible asset would normally stem from legal rights that are enforceable
in a court of law.
d. All of these statements are true.
9. Which of the following is a criterion that must be met in order for an intangible
asset to be recognized other than goodwill?
a. The asset is identifiable and lacks physical substance.
b. The asset is expected to be used in the production or supply of goods or
services.

c. The asset is part of the activities aimed at gaining new scientific or

technical knowledge.
d. The fair value can be measure reliably.
10. Which of the following represents the maximum amortization period
mandated for intangible assets with finite useful life?
a.
b.
c.
d.

10 years
20 years
40 years
No arbitrary cap on the useful life has been established.

ANSWER
1. b
2. d
3. d
4. b
5. d
6. c.
7. b
8. d
9. d
10. d