Palm Beach Ltd has a cash generating unit (CGU)and has been assessed for impairment and it has determined an impairment loss of $100 000. The following information relates to the assets as at 30 June 2012. \[\begin{array} { | l | r | r | } \hline & \text { Carrying amount } & \text { Recoverable amount } \\ \hline \text { Buildings } & 800000 & 900000 \\ \hline \text { Equipment } & 200000 & 150000 \\ \hline \text { Goodwill } & 50000 & \\ \hline \end{array}\] In accordance with AASB 136 Impairment of Assets what should be the carrying amount of equipment as at 30 June 2012?

A) $0 B) $100 000 C) $150 000 D) $190 000 A) $0 B) $100 000 C) $150 000 D) $190 000

Shelley Beach Ltd has one cash generating unit (CGU)and it has been determined that the CGU has incurred an impairment loss of $80 000 for the year ended 30 June 2012. The carrying amounts of the assets as at 30 June 2012 are as follows: \[\begin{array} { | l | r | } \hline & \text { Carrying amount } \\ \hline \text { Buildings } & 300000 \\ \hline \text { Equipment } & 300000 \\ \hline \text { Goodwill } & \underline { 20000 } \\ \hline \text { Total } & \underline { 620000 } \\ \hline \end{array}\] In accordance with AASB 136 Impairment of Assets,what should be the carrying amounts for buildings,equipment and goodwill as at 30 June 2012,respectively?

A) $240 000; $300 000; $0 B) $260 000; $260 000; $20 000 C) $270 000; $270 000; $0 D) $300 000; $300 000; $20 000 A) $240 000; $300 000; $0 B) $260 000; $260 000; $20 000 C) $270 000; $270 000; $0 D) $300 000; $300 000; $20 000

Exam 8: Accounting for Intangibles

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Castle Co Ltd is working on three research projects.Project Jonah is government-sponsored research on synthesising currently available research results on the possible triggers of asthma attacks.Project Beta involves researching the genetic tags associated with heart disease based on the genome project.A test to identify the predisposition to heart disease in children has been developed and will be on the market in 2013.Since 2011 research and development expenditures on this project are applied development costs only.Project Sigma is cutting edge research being conducted to try and discover a means of 'disassembling' molecules and then 'reassembling' them in their original form.The company hopes that this work will lay the basis for future dreams of teleportation as a method of transport.Details of expenditures and recoverable amounts expected beyond a reasonable doubt at this time are: What is the total research and development deferral for each project as at the end of the year 2012?

(Multiple Choice)

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Question 61

Explain why intangible assets are required to be reported as a separate class of asset in the statement of financial position.

(Short Answer)

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Question 62

An active market is defined in the standards as a market that has:

(Multiple Choice)

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Question 63

International convergence has meant that there is no longer one specific standard related to intangibles

(True/False)

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Question 64

Expenditure on an intangible asset that was initially expensed may be recognised as part of an intangible asset at a later date.

(True/False)

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Question 65

Palm Beach Ltd has a cash generating unit (CGU)and has been assessed for impairment and it has determined an impairment loss of $100 000. The following information relates to the assets as at 30 June 2012. Carrying amount Recoverable amount Buildings 800000 900000 Equipment 200000 150000 Goodwill 50000 In accordance with AASB 136 Impairment of Assets what should be the carrying amount of equipment as at 30 June 2012?

(Multiple Choice)

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Question 66

Compared to the requirement in the US,the treatment of research and development costs in Australia is less conservative (that is,likely to result in higher profits).

(True/False)

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Question 67

According to AASB 138 on intangible assets,if an entity buys another entity separate values can be assigned to purchased goodwill and to a brand name.

(True/False)

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Question 68

Outline the requirements of AASB 138 on recognition and measurement of research and development activities.

(Essay)

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Question 69

There are only rare occasions when an identifiable intangible asset should be amortised.

(True/False)

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Question 70

As part of adopting IFRS,goodwill acquired in a business combination is no longer amortised.Instead,the acquirer shall test goodwill for impairment (AASB 3 Business Combinations).When is goodwill considered to be impaired?

(Multiple Choice)

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Question 71

An intangible asset with a finite useful life can be amortised when:

(Multiple Choice)

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Question 72

Discuss the factors considered to determine amortisation of deferred development costs.

(Essay)

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Question 73

Far-flung Co Ltd purchases Local Co Ltd for the purchase consideration of: $Far-flung Co Ltd purchases Local Co Ltd for the purchase consideration of: Far-flung incurred legal fees of $6000 to complete the acquisition.Local Co Ltd had the following assets and liabilities at the time of the purchase \begin{array} { | l | r | r | r | } \hline & \mathbf {Carrying amount } &\mathbf {Recoverable~ amount } & \mathbf { Fair~ value } \\ \hline \mathbf { Assets: } & & & \\ \hline \text { Land } & 100000 & 150000 & 200000 \\ \hline \text { Machinery } & 50000 & 80000 & 85000 \\ \hline \text { Cash } & 20000 & & \\ \hline \mathbf { Liabilities: } & & & \\ \hline \text { Loan } & 105000 & & \\ \hline \end{array} What is the value of goodwill,if any?$ Far-flung incurred legal fees of $6000 to complete the acquisition.Local Co Ltd had the following assets and liabilities at the time of the purchase Land 100000 150000 200000 Machinery 50000 80000 85000 Cash 20000 Loan 105000 What is the value of goodwill,if any?

(Multiple Choice)

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Question 74

Shelley Beach Ltd has one cash generating unit (CGU)and it has been determined that the CGU has incurred an impairment loss of $80 000 for the year ended 30 June 2012. The carrying amounts of the assets as at 30 June 2012 are as follows: Carrying amount Buildings 300000 Equipment 300000 Goodwill Total In accordance with AASB 136 Impairment of Assets,what should be the carrying amounts for buildings,equipment and goodwill as at 30 June 2012,respectively?

(Multiple Choice)

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Question 75

The requirement of AASB 138 in relation to the amortisation of development cost is that:

(Multiple Choice)

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Question 76

The approach to accounting for intangibles raises some issues because:

(Multiple Choice)

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Question 77

Showing 61 - 77 of 77

Exam 8: Accounting for Intangibles

Explain why intangible assets are required to be reported as a separate class of asset in the statement of financial position.

An active market is defined in the standards as a market that has:

International convergence has meant that there is no longer one specific standard related to intangibles

Expenditure on an intangible asset that was initially expensed may be recognised as part of an intangible asset at a later date.

Compared to the requirement in the US,the treatment of research and development costs in Australia is less conservative (that is,likely to result in higher profits).

According to AASB 138 on intangible assets,if an entity buys another entity separate values can be assigned to purchased goodwill and to a brand name.

Outline the requirements of AASB 138 on recognition and measurement of research and development activities.

There are only rare occasions when an identifiable intangible asset should be amortised.

As part of adopting IFRS,goodwill acquired in a business combination is no longer amortised.Instead,the acquirer shall test goodwill for impairment (AASB 3 Business Combinations).When is goodwill considered to be impaired?

An intangible asset with a finite useful life can be amortised when:

Discuss the factors considered to determine amortisation of deferred development costs.

The requirement of AASB 138 in relation to the amortisation of development cost is that:

The approach to accounting for intangibles raises some issues because:

An Overview of the Australian External Reporting Environment

The Conceptual Framework of Accounting and Its Relevance to Financial Reporting

Theories of Accounting

An Overview of Accounting for Assets

Depreciation of Property, plant and Equipment

Revaluations and Impairment Testing of Non-Current Assets

Inventory

Accounting for Heritage Assets and Biological Assets

An Overview of Accounting for Liabilities

Accounting for Leases

Accounting for Employee Benefits

Share Capital and Reserves

Accounting for Financial Instruments

Revenue Recognition Issues

The Statement of Comprehensive Income and Statement of Changes in Equity

Accounting for Share-Based Payments

Accounting for Income Taxes

The Statement of Cash Flows

Accounting for the Extractive Industries

Accounting for General Insurance Contracts

Accounting for Superannuation Plans

Events Occurring After the End of the Reporting Period

Segment Reporting

Related Party Disclosures

Earnings Per Share

Accounting for Group Structures

Further Consolidation Issues I: Accounting for Intragroup Transactions

Further Consolidation Issues II: Accounting for Non-Controlling Interests

Further Consolidation Issues IV: Accounting for Changes in the Degree of Ownership of a Subsidiary

Accounting for Equity Investments,including Investments in Associates and Joint Arrangements

Accounting for Foreign Currency Transactions

Translating the Financial Statements of Foreign Operations

Accounting for Corporate Social Responsibility

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