Question

Question 1 (1 point) The fair value of the asset, debt, or equity securities given in a noncash acquisition should determine the value of the consideration received. True False Question 2 (1 point) The interest capitalization period for a self-constructed asset ends either when the asset is substantially complete and ready for use or when interest costs no longer are being incurred. True False Question 3 (1 point) A distinguishing characteristic of intangible assets is that the extent and timing of their future benefits typically are highly uncertain. True False Question 4 (1 point) The initial cost of property, plant, and equipment includes all the identifiable expenditures necessary to bring the asset to its desired condition and location for use. True False Question 5 (1 point) Costs incurred after discovery of a natural resource but before production begins are reported as expenses of the period in which the expenditures are made. True False

Answer 1

Part 1

True

To determine consideration received in case of noncash acquisition transaction, the fair value of net assets is calculated.

Part 2

True

After the complete usage of asset, the interest costs are not to be capitalized.

Part 3

True

It is difficult to determine the estimated life of intangible assets.

Part 4

True

All costs that are incurred to put assets into the use are capitalized and added to the purchase price to determine the cost of asset.

Part 5

False

These costs are development costs are to be capitalized.