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CA Inter AS 26 Intangible Assets — practice questions

Explore 56 free AS 26 Intangible Assets questions in CA Inter Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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AS 26 Intangible Assets questions and exercises with answers

Showing questions 1–30 of 56.

How does AS 26 treat internally generated goodwill?Read the answer and worked solution →Under AS 26, spending in the research phase of a project is:Read the answer and worked solution →AS 26 presumes the useful life of an intangible will not exceed:Read the answer and worked solution →What residual value does AS 26 normally assume for an intangible asset?Read the answer and worked solution →If the pattern of consumption of benefits cannot be reliably found, which method applies?Read the answer and worked solution →How often must the amortisation period and method be reviewed at minimum?Read the answer and worked solution →Which description fits an intangible asset under AS 26?Read the answer and worked solution →Carrying amount of an intangible is cost net of:Read the answer and worked solution →An impairment loss arises when the carrying amount of an asset is:Read the answer and worked solution →The depreciable amount of an intangible asset equals:Read the answer and worked solution →Which item can never be capitalised if internally generated?Read the answer and worked solution →An intangible asset is measured initially at:Read the answer and worked solution →Licence Rs 20 lakh, duty Rs 2 lakh, recoverable tax Rs 1 lakh, fees Rs 0.5 lakh, discount Rs 1 lakh. Cost?Read the answer and worked solution →An import licence allotted free by the government is recognised at:Read the answer and worked solution →The cost of an intangible acquired in exchange is fixed under:Read the answer and worked solution →In a purchase-type amalgamation, an intangible is recognised:Read the answer and worked solution →An amalgamation-acquired intangible whose fair value cannot be measured reliably is:Read the answer and worked solution →Without an active market, an intangible's cost in a purchase-type amalgamation cannot create or increase:Read the answer and worked solution →Which is a condition for recognising a development-phase intangible?Read the answer and worked solution →Which is a typical development activity rather than research?Read the answer and worked solution →If research and development cannot be told apart, spend is treated as:Read the answer and worked solution →A project cost Rs 14 lakh; Rs 11 lakh was spent before the criteria were met. Capitalised?Read the answer and worked solution →Interest in the cost of an internal intangible follows criteria of which standard?Read the answer and worked solution →Preliminary expenses to set up a new legal entity are:Read the answer and worked solution →A firm spends Rs 6 lakh on a product ad campaign. Treatment?Read the answer and worked solution →Spending on training activities is, as a rule, treated as:Read the answer and worked solution →A loyal customer base with no legal protection usually counts as:Read the answer and worked solution →Advance payment for services not yet received is:Read the answer and worked solution →A cost expensed in an earlier year, when the project later qualifies, is:Read the answer and worked solution →Spending after purchase on an acquired brand name is:Read the answer and worked solution →

Worked practice questions

How does AS 26 treat internally generated goodwill?

  1. Recognised at estimated fair value
  2. Recognised over five years
  3. Recognised once it is audited
  4. Not recognised as an asset
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Correct answer: D. Not recognised as an asset

Internally generated goodwill is not an identifiable resource controlled by the enterprise whose cost can be measured reliably, so it is never booked.

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Under AS 26, spending in the research phase of a project is:

  1. Shown as a current asset
  2. Expensed when it is incurred
  3. Capitalised as an intangible
  4. Deferred and written off in 3 years
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Correct answer: B. Expensed when it is incurred

In the research phase an enterprise cannot show that probable future benefits exist, so the outlay is charged to expense immediately.

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AS 26 presumes the useful life of an intangible will not exceed:

  1. Eight years
  2. Twenty years
  3. Five years
  4. Ten years
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Correct answer: D. Ten years

The standard sets a rebuttable presumption of a maximum ten year life, counted from the date the asset is available for use.

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More Accounting topics

AS 3 Cash Flow StatementSchedule III Division I Financial StatementsAS 19 LeasesValuation of Inventories (AS 2)AS 22 Taxes on IncomeAS 28 Impairment of AssetsProperty, Plant and EquipmentAS 17 Segment Reporting