INTERMEDIATE ACCOUNTING
8th Edition
ISBN: 9780078025839
Author: J. David Spiceland
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 11, Problem 11.12BE
IFRS; impairment; property, plant, and equipment
• LO11–8, LO11–10
IFRS
Refer to the situation described in BE 11–13. Assume that the present value of the estimated future
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9. Under PAS 38 Intangible Assets, intangible assets are
amortized
a. using straight-line method applied to the shorter of an
. intangible asset's useful life and legal life
b. using an amortization method that best reflects the pattern
in which the asset's future economic benefits are expected
to be consumed by the entity.
C. using a residual value of zero, except in cases where the
revaluation model if applied.
d. all of these
10. Changes in amortization method, useful life, and residual
value are changes in accounting estimates and are accounted
for
a. prospectively.
b. retrospectively.
C. a or b
d. not accounted
QUESTION 10
Which of the following statements is false regarding intangible assets?
O a. Intangibles with an indefinite life are not subject to amortization.
O b.Purchased intangibles are recorded as assets for the amount paid to acquire them.
O c. Internally developed intangibles should be recorded as assets for the amount spent to develop them.
O d. Intangibles with a finite life should be amortized on a straight-line basis.
Q23
Which of the following statement(s) is (are) true?
(i) An intangible asset is impaired if the carrying amount is higher than its recoverable amount
(ii) Recoverable amount is the asset’s fair value or its value-in-use at the reporting date.
(iii) For an intangible asset with infinite useful life, impairment test should be performed only if there is evidence to indicate that an intangible asset has been impaired.
(iv) For an intangible asset with finite useful life, impairment test should be performed annually even if there is no evidence that the asset has been impaired.
Select one:
a. (i), (ii), (iii) and (iv)
b. (i) and (ii) only
c. (i) and (iv) only
d. (i) only
Chapter 11 Solutions
INTERMEDIATE ACCOUNTING
Ch. 11 - Prob. 11.1QCh. 11 - Depreciation is a process of cost allocation, not...Ch. 11 - Identify and define the three characteristics of...Ch. 11 - Discuss the factors that influence the estimation...Ch. 11 - What is meant by depreciable base? How is it...Ch. 11 - Prob. 11.6QCh. 11 - Prob. 11.7QCh. 11 - Why are time-based depreciation methods used more...Ch. 11 - Prob. 11.9QCh. 11 - Briefly explain the differences and similarities...
Ch. 11 - Prob. 11.11QCh. 11 - Prob. 11.12QCh. 11 - What are some of the simplifying conventions a...Ch. 11 - Explain the accounting treatment required when a...Ch. 11 - Explain the accounting treatment and disclosures...Ch. 11 - Explain the steps required to correct an error in...Ch. 11 - Prob. 11.17QCh. 11 - Prob. 11.18QCh. 11 - Prob. 11.19QCh. 11 - Prob. 11.20QCh. 11 - Briefly explain the differences between U.S. GAAP...Ch. 11 - Under U.S. GAAP, litigation costs to successfully...Ch. 11 - Cost allocation At the beginning of its fiscal...Ch. 11 - Prob. 11.2BECh. 11 - Prob. 11.3BECh. 11 - Prob. 11.4BECh. 11 - Prob. 11.5BECh. 11 - Prob. 11.6BECh. 11 - Prob. 11.7BECh. 11 - Prob. 11.8BECh. 11 - Prob. 11.9BECh. 11 - Impairment; property, plant, and equipment LO118...Ch. 11 - Prob. 11.11BECh. 11 - IFRS; impairment; property, plant, and equipment ...Ch. 11 - Prob. 11.13BECh. 11 - Prob. 11.14BECh. 11 - IFRS; impairment; goodwill LO1110 IFRS Refer to...Ch. 11 - Subsequent expenditures LO119 Demmert...Ch. 11 - Prob. 11.1ECh. 11 - Prob. 11.2ECh. 11 - Prob. 11.3ECh. 11 - Prob. 11.4ECh. 11 - Depreciation methods; solving for unknowns LO112...Ch. 11 - Prob. 11.6ECh. 11 - Prob. 11.7ECh. 11 - Prob. 11.8ECh. 11 - Prob. 11.9ECh. 11 - Prob. 11.10ECh. 11 - Prob. 11.11ECh. 11 - Prob. 11.12ECh. 11 - Prob. 11.13ECh. 11 - E 11–14
Cost of a natural resource; depletion and...Ch. 11 - Prob. 11.15ECh. 11 - Prob. 11.16ECh. 11 - Prob. 11.17ECh. 11 - Prob. 11.18ECh. 11 - Prob. 11.19ECh. 11 - Prob. 11.20ECh. 11 - Prob. 11.21ECh. 11 - Prob. 11.22ECh. 11 - Impairment; property, plant, and equipment LO118...Ch. 11 - IFRS; impairment; property, plant, and equipment ...Ch. 11 - E 11–25
IFRS; Impairment; property, plant, and...Ch. 11 - Impairment; property, plant, and equipment LO118...Ch. 11 - Prob. 11.27ECh. 11 - Prob. 11.28ECh. 11 - Prob. 11.29ECh. 11 - FASB codification research LO118 The FASB...Ch. 11 - Prob. 11.31ECh. 11 - Subsequent expenditures LO119 Belltone Company...Ch. 11 - E11–33
IFRS; amortization; cost to defend a patent...Ch. 11 - Prob. 11.34ECh. 11 - Concept s; terminology LO111 through LO116, LO118...Ch. 11 - E11–36
Retirement and replacement...Ch. 11 - Prob. 1CPACh. 11 - LO11–2
2. Calculate depreciation for year 2 based...Ch. 11 - Prob. 3CPACh. 11 - Prob. 4CPACh. 11 - Prob. 5CPACh. 11 - Prob. 6CPACh. 11 - Prob. 7CPACh. 11 - Prob. 8CPACh. 11 - Prob. 9CPACh. 11 - Prob. 10CPACh. 11 - Prob. 11CPACh. 11 - Prob. 12CPACh. 11 - Prob. 13CPACh. 11 - Prob. 14CPACh. 11 - Prob. 1CMACh. 11 - Prob. 2CMACh. 11 - Prob. 3CMACh. 11 - P 11–1
Depreciation methods; change in...Ch. 11 - Prob. 11.2PCh. 11 - Prob. 11.3PCh. 11 - Prob. 11.4PCh. 11 - Prob. 11.5PCh. 11 - Prob. 11.6PCh. 11 - Prob. 11.7PCh. 11 - Prob. 11.8PCh. 11 - Prob. 11.9PCh. 11 - Prob. 11.10PCh. 11 - Prob. 11.11PCh. 11 - Prob. 11.12PCh. 11 - Prob. 11.13PCh. 11 - Analysis Case 111 Depreciation, depletion, and...Ch. 11 - Communication Case 112 Depreciation LO111 At a...Ch. 11 - Judgment Case 113 Straight-line method; composite...Ch. 11 - Prob. 11.4BYPCh. 11 - Prob. 11.5BYPCh. 11 - Prob. 11.7BYPCh. 11 - Prob. 11.8BYPCh. 11 - Research Case 119 FASB codification; locate and...Ch. 11 - Prob. 11.10BYPCh. 11 - Prob. 11.11BYPCh. 11 - Prob. 11.13BYPCh. 11 - Prob. 11.14BYPCh. 11 - Real World Case 1115 Depreciation and depletion...Ch. 11 - Prob. 11.16BYPCh. 11 - Prob. 11.17BYP
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- Q21 Which of the following is NOT a step in impairment testing? Select one: a. Sell the asset after if the fair value is greater than the recoverable amount b. Calculate the asset’s carrying amount in the books of the entity c. Calculate the recoverable amount of the asset d. Assess whether there are circumstances that may indicate that the asset should be impaired.arrow_forwardQUESTION 19 When a company decreases the estimated useful life of a PP&E asset O a. It is admitting it made a mistake and needs to correct the financial statements affected by this mistake. O b. It will recognize less total depreciation expense than it originally planned. c. It must revise depreciation expense for future periods only. O d. It must disclose the change in estimate but depreciation expense will not change.arrow_forwardQ1 Which of the following statement (s) is (are) true? (i) When no future economic benefits are no longer expected to flow from an intangible asset, such asset should be derecognized the financial statements of an organization. (ii) When an intangible asset is derecognized, the carrying amount should be written off as a loss in the profit or loss statement at the date of retirement of the asset. (iii) When an intangible asset is sold, the difference between the carrying amount and consideration received is recognized in the profit or loss statement at the date of the sale. (iv) Consideration to be received in the event of sale of an intangible asset should only be cash Select one: a. (ii) and (iv) only b. (i) and (ii) only c. (i) and (iv) only d. (i), (ii) and (iii) onlyarrow_forward
- 64 Analyze the following: I – Any gain on a subsequent increase in the fair value less cost of disposal of a noncurrent asset classified as held for sale should always be recognized in full. II – Results from discontinued operation should be presented in the income statement as a single amount on the face of the said statement below the income from continuing operations. III – The total external revenue of all reportable segments should be 75% or more of the entity's external revenue to pass the 75% overall size test for reportable segments. Given these, we can conclude that: Group of answer choices Only statement II is not false. Only statement I is not false. Only statements II and III are not true. Statement III is not false.arrow_forwardq19 Which statement is INCORRECT regarding recognition of intangible assets? Select one: a. An intangible asset should be initially recorded at cost. b. An intangible asset acquired in exchange of another asset can be recognized at the fair value of the asset given up in exchange. c. An intangible asset can only be recognized if its cost can be measured reliably. d. An intangible asset can be recorded at its fair value if its cost cannot be ascertained.arrow_forwardWhich statement is INCORRECT about subsequent measurement of intangible assets? Q7 Select one: a. When using the cost model an entity should estimate the estimated useful life as well as the estimated residual value if the asset is determined to have an indefinite useful life b. When using the cost model an entity should estimate the estimated useful life as well as the estimated residual value if the asset is determined to have a definite useful life. c. The same model chosen by an entity should be used for all intangible assets in the same class. d. Intangible assets may be measured using either the cost model or the revalued cost model.arrow_forward
- q24 Which of the following is NOT a step in impairment testing? Select one: a. Calculate the asset’s carrying amount in the books of the entity b. Sell the asset after if the fair value is greater than the recoverable amount c. Calculate the recoverable amount of the asset d. Assess whether there are circumstances that may indicate that the asset should be impaired.arrow_forward94 2. According to the revised Conceptual Framework, the asset is a right, while the liability is the obligation, rather than ultimate inflows or outflows of economic benefits resultin from the asset or liability. 3. Legal enforceability of a right, for example ownership necessary for control over an economic resource to exist 4. According to the revised Conceptual Framework, an asset exist even if the probability that it will provide inflows future economic benefits is low, and even if the asset is subie to a high measurement uncertainty. 5. According to the revised Conceptual Framework, what the entin controls is the right, and not the ultimate inflows of futu economic benefits that the economic resource may produce. 6. The Conceptual Framework defines income and expenses in terms of changes in assets and liabilities. 7. Not all items that meet the definition of a financial statement element are recognized; they are recognized only if recognizing them will also result in relevant and…arrow_forwardIn accordance with IAS 36 Impairment of Assets, which one of the following is an indicator that an asset may be impaired? a. evidence that the asset is physically damaged b. a fall in interest rates that materially affects the asset’s value in use c. the market capitalisation of the entity is greater than the carrying amount of its net assets d. a decline in the asset’s market value, as would be expected from normal usearrow_forward
- t.no13arrow_forward43 If the “fair value less cost to sell” of a noncurrent asset held for sale is lower than its carrying value, the difference is treated as a. gain b. impairment loss c. depreciation expense d. prior period adjustmentarrow_forward4G+ 12:43 PM 12.6KB/s © l 61 00:17:22 Remaining Multiple Choice The cost of intangible asset acquired by way of government grant is recorded at Fair value Nominal amount plus directly attributable costs Fair value or nominal amount plus directly attributable costs, whichever is lower Fair value or nominal amount plus directly attributable costs, representing an accounting policy choice by the entity 7 of 25 レarrow_forward
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