Which of the following intangible assets is recognised on a company’s balance sheet?

Question

BlackTom AI · Accepted Answer

To tackle the question, we examine what types of intangible assets are typically recognized on a company's balance sheet.
Option a: Self-generated intangible assets. While some self-generated assets can be recognized if they meet strict criteria (e.g., development costs that meet capitalization criteria under IAS 38), many internally generated intangibles are expensed as incurred or not recognized until they meet specific recognition requirements. Therefore this option is not universally recognized and cannot be assumed as always on the balance sheet.
Option b: Employee relationships. This is not typically recognized as a separate asset on the balance sheet. Although such relationships may add value, accounting standards generally do not permit recognizing them as intangible assets due to measurement and control limitations.
Option c: Purchased intangible assets. This is the standard category that is recognized on the balance sheet. When an intangible asset is acquired, it is recorded at cost and subsequently amortized or tested for impairment, provided it has finite or indefinite life according to the relevant accounting framework.
Option d: Executive leadership. Leadership or senior personnel are not recognized as intangible assets on the balance sheet because they do not meet the recognition criteria for identifiable, separable, and measurable future economic benefits.
In summary, among the given choices, purchased intangible assets are the typical items recognized on the balance sheet, while the others either may not be recognized or require specific conditions to be met before recognition.

Which of the following intangible assets is recognised on a company’s balance sheet?

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