Intangibles, Tax, and Cash Flow Flashcards

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

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

IAS 38 requires identifiability, control, and probable future benefits for intangible asset recognition.

Under IAS 38, internally generated goodwill is:

Answer: Not recognised as an asset

IAS 38 prohibits recognition of internally generated goodwill because it cannot be reliably measured.

Under IAS 38, research costs are:

Answer: Expensed as incurred

IAS 38 requires research phase costs to be expensed because they do not yet meet the asset recognition criteria.

Under IAS 12, a deferred tax liability arises when:

Answer: The carrying amount of an asset exceeds its tax base

A taxable temporary difference—carrying amount exceeds tax base—creates a deferred tax liability.

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

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

IAS 12 requires probability of future taxable profits against which the deductible difference can be offset.

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

Answer: Proceeds from issuing shares

IAS 7 classifies proceeds from equity and borrowing transactions as financing activities.