Question

Which of the following statement(s) relating to intangible assets is/are correct?

a) Research on market potential, prior to launching a product, can be capitalized

b) Applied research, calculated to achieve a stated aim, can be capitalized.

c) An asset should never be capitalized if it has no physical existence

d) A resource, though intangible, may be capitalized, if it is identifiable and meets the capitalization criteria.

• A. A only
• B. D only
• C. B and C
• D. A & D

Answer 1

The correct option is B D only

An intangible asset is an asset that lacks physical substance and usually is very hard to evaluate. It includes patents, copyrights, franchises, goodwill, trademarks, and trade names, and the general interpretation also includes software and other intangible computer based assets.

Examples of intangible assets include goodwill, brand recognition, copyrights, patents, trademarks, trade names, and customer lists. You can divide intangible assets into two categories: intellectual property and goodwill.