Reporting on intangibles is all a bit of a muddle

Multiple-choice questions: In order to be awarded CPD units you must answer the following five random questions correctly. If you fail the test, please re-read the article before attempting the questions again

  1. Why is there a gap between the market value of a company and its book value?

  2. What is an intangible?

  3. Which of these is not a reason why intangibles are hard to assess?

  4. Why might the gap between market and book value of companies be growing?

  5. Which of these is not one of the six tests under IAS 38 before any development cost must be recognised as an asset

  6. Why might reporting research and development costs be useful for investors?

  7. Why might a company not report its R&D costs?

  8. Which of the following is a common problem with companies that do report their R&D costs?

  9. How might a company address reporting its R&D costs accurately?

  10. Which of these is not an issue that the International Accounting Standards Board might want to address in a review of accounting for intangibles