ASA Intangible Asset Valuation 1

Question 1

Which of the following best defines an intangible asset in the context of ASA appraisal practice?

Accepted Answer

A non-physical asset that provides future economic benefits

Answer

Intangible assets are defined as non-physical assets that provide future economic benefits to their owner, which is the foundation of their appraisal.

Question 2

The relief-from-royalty method is most commonly used to value which type of intangible asset?

Accepted Answer

Trade names and trademarks

Answer

The relief-from-royalty method values an intangible by estimating the royalties saved by owning the asset, and is most frequently applied to trade names and trademarks because they are commonly licensed.

Question 3

In the Multi-Period Excess Earnings Method (MPEEM), 'contributory asset charges' represent:

Accepted Answer

Required returns on all other assets that contribute to the subject intangible's earnings

Answer

Contributory asset charges represent the required returns on all other assets (tangible and intangible) that support the earnings attributable to the primary subject intangible.

Question 4

Which of the following is generally considered a 'separable' intangible asset under ASC 805?

Accepted Answer

Customer lists

Answer

Customer lists meet the separability criterion under ASC 805 because they can be sold, transferred, or licensed independently from the rest of the business.

Question 5

Goodwill in a business combination is best described as:

Accepted Answer

The residual after allocating fair value to all identifiable assets and liabilities

Answer

Goodwill is calculated as the excess of the purchase price over the aggregate fair values of all identifiable net assets acquired in the business combination.

ASA - American Society of Appraisers Certification Practice Test

ASA - American Society of Appraisers Certification Practice Test

ASA Intangible Asset Valuation 1