Skip to content

CMA Final · Corporate Financial Reporting · Intangible Assets (Ind AS 38)

Aarav Retail Ltd leases web site software from a vendor under an arrangement that is accounted for under Ind AS 116. Which statement correctly describes the application of the web site costs Appendix to the lease expenditure?

The Appendix does not apply. Ind AS 38 excludes leases of intangible assets accounted for under Ind AS 116, and the web site costs Appendix likewise excludes web site software expenditure that is accounted for under Ind AS 116, so the lease follows Ind AS 116.

  1. AThe Appendix applies because the web site is for external access
  2. BThe Appendix applies only to the operating stage of the web site
  3. CThe Appendix does not apply, as leases of intangible assets accounted for under Ind AS 116 are outside Ind AS 38Correct
  4. DThe Appendix applies if the lease term exceeds one year

Explanation

Ind AS 38 does not apply to leases of intangible assets accounted for in accordance with Ind AS 116. The Appendix likewise does not apply to expenditure on web site software accounted for under Ind AS 116. The lease term or external access does not change this.

Did you get it right without looking?

One question tells you little. A timed set on Intangible Assets (Ind AS 38) shows your real accuracy, how long you take and where you lose marks.

Practise Intangible Assets (Ind AS 38)Free diagnostic mock

More Intangible Assets (Ind AS 38) questions