Q6. Which of the following statements is NOT correct about measuring fair value
ID: 2596797 • Letter: Q
Question
Q6. Which of the following statements is NOT correct about measuring fair value of the intangible assets? A. Auditor should evaluate whether the entity has control activities in the acquisition process to ensure that all identifiable asset categories are separately valued and the valuation specialists used are qualified and objective. B. Fair value measurements may arise from both the initial recording of a transaction and later changes in value. Changes in fair value measurement may be treated in different way under GAAP C. Accounting standards do not have requirements on companies recording internally generated intangibles as assets on the balance sheet. And intangibles are recorded whenever the assets are acquired through purchase or acquisition. D. Management is responsible for making fair value measurements and disclosures in accordance with GAAP E. All of the above are CorrectExplanation / Answer
The following statement is not correct:
Option [C ]
“Accounting statements do not have requirements on companies recording internally generated intangibles as assets on the balance sheet. And intangibles are recorded whenever the assets are acquired through purchase or acquisition.”
Reason:
As per IAS 38, an entity is required to recognize an intangible asset, whether purchased or self-created (at cost) if, and only if,
This requirement apllies whether a intangible assets is acquired externally or generated internally.
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