Under IFRS Standards, many purchased intangible assets are recognised assets, while the cost to develop an identical asset internally must be charged to expense.
A. True
B. False
Under IFRS Standards, a 'bearer plant' such as grapevines in a vineyard are measured at fair value at each reporting date, with changes in fair value recognised in profit or loss. (This question refers to the vines, not the grapes.)
A. True
B. False
The answers to the quiz questions are as follows:
Answer: True
Under IAS 38 Intangible Assets, a purchased intangible asset is recognized if it is probable that future economic benefits will flow to the entity and its cost can be measured reliably. Conversely, costs incurred to develop an intangible asset internally are generally expensed as incurred, unless they meet strict criteria for capitalization during the development phase (research costs must always be expensed).
Answer: False
While bearer plants (like grapevines) were previously measured at fair value under IAS 41, they are now accounted for as Property, Plant and Equipment under IAS 16 Property, Plant and Equipment. Entities can choose to measure them using either the cost model or the revaluation model, not strictly at fair value at each reporting date. However, the produce growing on the bearer plants must still be measured at fair value less costs to sell under IAS 41.
Summary:
Question 1: True (Purchased assets are recognized; internally developed costs are generally expensed).
Question 2: False (Bearer plants are accounted for under IAS 16 using a cost or revaluation model, not fair value measurement).
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