1. Which is incorrect concerning the criterion of control by the enterprise of the intangible asset? a. The skill of employees arising out of the benefits of training costs can be recognized as intangible asset. b. The capacity of the enterprise to control the economic benefits from an intangible asset would normally stem from legal rights that are enforceable in a court of law. c. An enterprise controls an asset if the enterprise has the power to obtain the future economic benefits flowing from the underlying resource and also can restrict the access of others to those benefits.’ d. Market and technical knowledge may give rise to future economic benefits which can be controlled by the enterprise if the knowledge is protected by legal rights such as copyright. 2. An entity is performing an annual test of the impairment of goodwill
1. Which is incorrect concerning the criterion of control by the enterprise of the intangible asset? a. The skill of employees arising out of the benefits of training costs can be recognized as intangible asset. b. The capacity of the enterprise to control the economic benefits from an intangible asset would normally stem from legal rights that are enforceable in a court of law. c. An enterprise controls an asset if the enterprise has the power to obtain the future economic benefits flowing from the underlying resource and also can restrict the access of others to those benefits.’ d. Market and technical knowledge may give rise to future economic benefits which can be controlled by the enterprise if the knowledge is protected by legal rights such as copyright. 2. An entity is performing an annual test of the impairment of goodwill
Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter12: Auditing Long-lived Assets And Merger And Acquisition Activity
Section: Chapter Questions
Problem 36CYBK
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1. Which is incorrect concerning the criterion of control by the enterprise of the intangible asset?
a. The skill of employees arising out of the benefits of training costs can be recognized as intangible asset.
b. The capacity of the enterprise to control the economic benefits from an intangible asset would normally stem from legal rights that are enforceable in a court of law.
c. An enterprise controls an asset if the enterprise has the power to obtain the future economic benefits flowing from the underlying resource and also can restrict the access of others to those benefits.’
d. Market and technical knowledge may give rise to future economic benefits which can be controlled by the enterprise if the knowledge is protected by legal rights such as copyright.
2. An entity is performing an annual test of the impairment of goodwill for a cash-generating unit. It has determined that the fair value of the unit exceeds the carrying amount. Which statement is true concerning the test of impairment?
a. Goodwill should be retested at the entity level.
b. Goodwill should be written down as impaired.
c. Impairment is not indicated and no additional analysis is necessary.
d. The assets and liabilities should be valued to determine if there has been an impairment of goodwill.
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