CFA Level I · CFA Level I Exam · Analyzing Balance Sheets
Under IFRS, which of the following items is most likely reported as an intangible asset on the balance sheet?
The purchased network licence is most likely an intangible asset, because it is identifiable, lacks physical substance, and was acquired for a fee. Prepaid insurance is a prepaid expense and raw materials are inventory, so neither is an intangible asset.
- APrepaid insurance covering the next nine months
- BA licence to operate a mobile network, purchased from the government for a fixed feeCorrect
- CRaw materials held for production
Explanation
A purchased licence is an identifiable non-monetary asset without physical substance, so it is intangible. Prepaid insurance is a current prepaid asset, and raw materials are inventory.
Did you get it right without looking?
One question tells you little. A timed set on Analyzing Balance Sheets shows your real accuracy, how long you take and where you lose marks.
More Analyzing Balance Sheets questions
- Under IFRS, inventories are most likely measured at:
- A company buys a five-year bond for 1,000,000 at par on 1 January, incurring no transaction costs. It pays a 4% annual coupon, and the bond …
- In a common-size analysis, a company's inventory rises from 18% to 30% of total assets while cash falls from 15% to 6% of total assets. This…
- A company reports cash of 120, marketable securities of 80, receivables of 200, inventory of 300 and current liabilities of 500 (all in € th…
- An analyst compares two otherwise identical banks. Bank X classifies its bond portfolio as measured at amortized cost, and Bank Y classifies…
- Under IFRS, a company presents its statement of financial position using a current/non-current classification. Which of the following items …