Certificate in International Financial Reporting Intangibles, Tax, and Cash Flow

Question 1

Under IAS 38, an intangible asset can be recognised only if:

Accepted Answer

It is identifiable, controlled by the entity, and expected to generate probable future economic benefits

Answer

It is separable from the entity

Answer

It has a finite useful life

Answer

It was purchased externally

Question 2

Under IAS 38, internally generated goodwill is:

Accepted Answer

Not recognised as an asset

Answer

Capitalised when it can be measured reliably

Answer

Recognised at cost

Answer

Amortised over 10 years

Question 3

Under IAS 38, research costs are:

Accepted Answer

Expensed as incurred

Answer

Capitalised when technical feasibility is established

Answer

Amortised over five years

Answer

Capitalised if management intends to complete the project

Question 4

Under IAS 12, a deferred tax liability arises when:

Accepted Answer

The carrying amount of an asset exceeds its tax base

Answer

The tax base of an asset exceeds its carrying amount

Answer

A temporary difference reverses

Answer

Tax losses are carried forward

Question 5

Under IAS 12, deferred tax assets are recognised only when:

Accepted Answer

It is probable that sufficient future taxable profit will be available to utilise the temporary difference

Answer

The deductible difference will reverse within one year

Answer

Management approves the recognition

Answer

The entity has no history of tax losses

Question 6

Under IAS 7, which of the following is classified as a financing activity in the cash flow statement?

Accepted Answer

Proceeds from issuing shares

Answer

Interest received on investments

Answer

Dividends received from associates

Answer

Taxes paid