CAF-1 · Chapter 6 · Question 8 of 15
Gamma Corp determines that a purchased broadcasting license has an indefinite useful life. How should this license be subsequently measured?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Not amortized, but tested for impairment annually or when there is an indication of impairment.
Explanation
An intangible asset with an indefinite useful life is not amortized. Instead, it must be tested for impairment annually or whenever there is an indication of impairment.
More IAS 38 Intangible Assets MCQs
- 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?
- Q12Which of the following costs should be included in the initial cost of a separately acquired intangible asset?
- Q13Delta Corp acquired an intangible asset in a business combination. How should the cost of this asset be initially measured?
- Q14When does the amortisation of an intangible asset with a finite useful life commence?