IFRS/IndAS Quiz

The answers to the quiz questions are as follows:

1. Purchased vs. Internally Developed Intangible Assets

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).

2. Measurement of Bearer Plants

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).