Unless acquired under a business combination, intangible assets must be initially measured using which of the following measurement approaches?
A) Net present value.
B) Cost.
C) Diminishing value.
D) Fair value.

Question

Quizplus · Accepted Answer

Intangible assets must be initially measured at cost, which includes all directly attributable costs necessary for acquiring, developing or enhancing the asset. Net present value and diminishing value are methods of calculating the depreciation of the asset over time, and fair value is only used in certain circumstances such as business combinations. But, for initial measurement, cost is the appropriate approach.

Unless Acquired Under a Business Combination, Intangible Assets Must Be