ACCA FR · Chapter 3 · Question 4 of 12
How does IAS 38 require a purchased intangible asset with an indefinite useful life to be accounted for after initial recognition?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) It is not amortised, but it is tested for impairment every year and whenever there is an indication of impairment
Explanation
An intangible asset with an indefinite useful life is not amortised. IAS 36 instead requires an annual impairment test, plus a test whenever there is an indication of impairment. Its useful life must also be reviewed each period to check that it is still indefinite.
More Intangible assets, impairment and assets held for sale MCQs
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