- 1 Marks
AA – L2 – SA – Q2.8 – Financial Statement Assertions
Question
In respect of intangible non-current assets select the principle financial statement assertion that is impacted.
- Expenses inappropriately capitalized as intangible assets
A Rights and obligations
B Existence
C Completeness - Intangible assets only tested for impairment every six years
D Valuation
E Existence
F Completeness
Answer
C, D
Explanation:
- Inappropriate capitalization of expenses as intangible assets impacts completeness (C), as expenses are omitted from the income statement.
- Infrequent impairment testing (every six years) impacts valuation (D), as assets may not reflect fair value. Rights and obligations (A), existence (B, E), and completeness (F) are not directly affected. Thus, C and D are correct.
- Tags: Financial Statement Assertions, ICAG, Impairment, Intangible assets
- Level: Level 2
- Topic: Audit and Assurance Evidence
- Uploader: Salamat Hamid