Question

The presentation of intangible assets in the financial statements

(a)Includes reporting R&D costs as an expense in the income statement.
(b)Involves crediting amortization directly to the intangible asset account.
(c)Includes the disclosure of the amortization expense for the next 5 years.
(d)All of these answer choices are correct.

Answer 1

Intangible assets are presented by reporting R&D costs as an expense in the income statement.

Step-by-step explanation:

The correct answer is (a) Includes reporting R&D costs as an expense in the income statement.

When it comes to the presentation of intangible assets in the financial statements, reporting research and development (R&D) costs as an expense in the income statement is one way to handle it. This is because the costs incurred in R&D activities cannot be capitalized as an intangible asset since they do not meet the criteria for recognition as an intangible asset. Instead, these costs are expensed in the period they are incurred.