CFA Practice Question
The following are reasons internally generated intangible assets are the most troublesome category except ______
A. it is difficult to measure the potential benefits of expenses such as advertising when made.
B. the costs incurred in developing these assets may not be easily separable.
C. their fair value is virtually impossible to determine.
Explanation: For many internally generated intangible assets, discounted cash flow analysis may be the only way to measure their fair value.
User Contributed Comments 7
| User | Comment |
|---|---|
| humphrey | therefore it's difficult, rather than 'virtually impossible'? |
| jwp2 | humphrey: the question stated "except". |
| mark98007 | "A" has nothing to do with the question of assets, and looks right to me for this-- can you reasonably capitalize advertising? |
| steved333 | Just remember that superlatives like "always", "never", and "virtually impossible" generally do not apply. |
| steved333 | also, A is saying that it is extremely difficult to quantify how advertising something like your trademark name (intangible) is going to be of benefit to you. How do you do a cost/benefit analysis if you can't quantify the benefit? |
| hannovanwyk | Steve333 has valid point for the exams.Superlatives gives indications on the validness of answers... |
| cjpatel | Point Taken! |