IAS 38 states that an intangible asset is deemed to have an indefinite life when there is no foreseeable end to the expected cash flows the asset is likely to generate. What is the impact of an indefinite life on amortization of the intangible asset's cost under IAS 38?
A) Management may choose any number of years over which to amortize the cost.
B) No amortization is taken as long as the life is considered indefinite.
C) The cost of the asset should be amortized over 20 years.
D) The cost of the asset should be expensed in the period the intangible asset is acquired.

Question

Quizplus · Accepted Answer

If an intangible asset is deemed to have an indefinite life, no amortization is taken as long as the life is considered indefinite. However, the asset should be reviewed annually for impairment.

IAS 38 States That an Intangible Asset Is Deemed to Have