CAF-1 · Chapter 6 · Question 5 of 15
Alpha Ltd has successfully developed a new brand name internally, spending Rs. 2 million on marketing and design. How should this internally generated brand be accounted for?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Recognized as an expense in profit or loss.
Explanation
Internally generated brands, mastheads, publishing titles, and customer lists cannot be distinguished from the cost of developing the business as a whole and shall not be recognized as intangible assets.
More IAS 38 Intangible Assets MCQs
- Q7Which of the following conditions must be met for an entity to use the revaluation model for an intangible asset?
- Q8Gamma Corp determines that a purchased broadcasting license has an indefinite useful life. How should this license be subsequently measured?
- Q9What is the assumed residual value of an intangible asset with a finite useful life, according to IAS 38?
- Q10If an entity reassesses an intangible asset's useful life from 'indefinite' to 'finite', how is this change treated?
- Q11Under SIC 32, when an entity develops a website for internal or external access, which costs can be capitalized as an intangible asset?