Day: March 10, 2024

Which of the following statements about intangible assets in public company financial statements are correct?

1.Internally generated goodwill should not be capitalised.

2.Purchased goodwill should normally be amortised through the income statement.

3.Development expenditure must be capitalised if certain conditions are met.

Select ONE answer:

1. 1 and 3 only
2. 1 and 2 only
3. 2 and 3 only
4. 1, 2 and 3

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – Purchased goodwill is retained in the statement of financial position subject to an impairment review.
2. Not correct
3. Not correct
4. Not correct

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