Required informationLearning Objective 11-04 Calculate the periodic amortization of anintangible asset.(The following information applies to the questions displayed below.]The allocation process for intangible assets is called amortization. For anintangible asset with a finite useful life, the capitalized cost less any estimatedresidual value must be allocated to periods in which the asset is expected tocontribute to the company's revenue-generating activities. An intangible assetthat is determined to have an indefinite useful life is not subject to periodicamortization. Goodwill is perhaps the most typical intangible asset with anindefinite useful life.Software development Knowledge Check 01On August 1, Year 1, SuperCool Software (SCS) began developing a software program to allowindividuals to customize their investment portfolios. Technological feasibility was established onJanuary 31 of year 2, and the program was available for release on March 31, year 2.Development costs were incurred as follows:August 1 through December 31, Year 1January 1 through January 31, Year 2February 1 through March 31, Year 2$4,000,000600,000900,000SCS expects a useful life of five years for the software and total revenues of $10,000,000during that time. During Year 2, SCS recognized $2,000,000 in revenue, included in the$10,000,000 total revenue estimate.Calculate the required amortization for Year 2 (Hint: calculate using both methods, choose thegreater number)Answer is complete but not entirely correct.Amortization for Year 22$18,000 X

Amortization is an accounting approach for lowering the book value of a loan or intangible asset…

Required information Learning Objective 11-04 Calculate the periodic amortization intangible asset. (The following information applies to the questions displayed below.] The allocation process for intangible assets is called amortization. For intangible asset with a finite useful life, the capitalized cost less any es residual value must be allocated to periods in which the asset is expec contribute to the company's revenue-generating activities, An intangih

Required information Learning Objective 11-04 Calculate the periodic amortization intangible asset. (The following information applies to the questions displayed below.] The allocation process for intangible assets is called amortization. For intangible asset with a finite useful life, the capitalized cost less any es residual value must be allocated to periods in which the asset is expec contribute to the company's revenue-generating activities, An intangih

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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9. Under PAS 38 Intangible Assets, intangible assets are amortized a. using straight-line method applied to the shorter of an . intangible asset's useful life and legal life b. using an amortization method that best reflects the pattern in which the asset's future economic benefits are expected to be consumed by the entity. C. using a residual value of zero, except in cases where the revaluation model if applied. d. all of these 10. Changes in amortization method, useful life, and residual value are changes in accounting estimates and are accounted for a. prospectively. b. retrospectively. C. a or b d. not accounted
(Multiple Choice Question) Amortizable Cost refers to 1. An asset's Net Book Value minus its Accumulated Amortization 2. The added cost of a capital asset after undergoing a capital improvement 3. The portion of the cost of the asset that will amortize over its useful life 4. The entire cost of a capital asset
What is the purpose of amortisation? To allocate the cost of an intangible non-current asset over its useful life To ensure that funds are available for the eventual purchase of a replacement non-current asset To reduce the cost of an intangible non-current asset in the statement of financial position to its estimated market value To account for the risk associated with intangible assets
Pre-Lecture Question 01 Which of the following is a characteristic of intangible assets? 1 They are all subject to amortization. 2 They are long-term in nature. 3 They are financial instruments. 4 They have physical existence.
Current Attempt in Progress Assuming there are no impairment losses, the balance in the Accumulated Depreciation account represents the R O amount charged to depreciation expense since the acquisition of the asset. O amount to be deducted from the cost of the asset to arrive at its fair value. O amount charged to depreciation expense in the current period. O cash fund to be used to replace assets. eTextbook and Media
List 3 common intangible assets. How is the life determined that is to be used to compute amortization?
the amortization of intangible assets with finite useful lives is justified by the : a- economic entity assumption b- going concern assumption c- monetary unit assumption d- historical cost assumption
Which statement is INCORRECT about subsequent measurement of intangible assets? Q7 Select one: a. When using the cost model an entity should estimate the estimated useful life as well as the estimated residual value if the asset is determined to have an indefinite useful life b. When using the cost model an entity should estimate the estimated useful life as well as the estimated residual value if the asset is determined to have a definite useful life. c. The same model chosen by an entity should be used for all intangible assets in the same class. d. Intangible assets may be measured using either the cost model or the revalued cost model.
PAS 16 requires that revaluation surplus resulting from initial revaluation property, plant and equipment should be treated in one of the following ways. Which of the four options mirrors the requirements of PAS 16? a. Released to the income statement an amount equal to the difference between the depreciation calculated on historical cost vis-à-vis revalued amount. b. Debited to the class of property, plant and equipment that is being revalued and credited to a reserve captioned “revaluation surplus” which is presented under “equity”. c. Deducted from current assets and added to the property, plant, and equipment. d. Credited to retained earnings as this is an unrealized gain.
Which of the following statements are true about the revaluation model perIAS 16 Property, Plant and Equipment?1) Excess depreciation as a result of a revaluation exercise can betransferred between reserves2) Depreciation must be charged based on the historical cost of theasset3) All assets of the same class must be revalued4) Valuations must be independent and carried out regularly Which is correct ?a) 1, 3 and 4b) All of the abovec) 1 and 3d) 2, 3 and 4
Which amortization method should be used for intangibles that are amortized? the straight-line method; all others are inappropriate a method based on an annual review for impairment any method is appropriate a method based on the expected pattern of benefits to be produced by the asset
Which of the following values for an intangible asset would a company capitalize and amortize? a.) purchase price b.) research costs c.) residual value d.) development costs