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Question
Assertion (A): Intangible Assets are the Assets which do not have physical existence.
Reason (R): Intangible Assets are shown under the head ‘Current Assets’ and Sub-head ‘Other-current Assets’.
In the context of the above two statements, which option is correct?
Options
Both Assertion (A) and Reason (R) are correct but Reason (R) is not the correct explanation for Assertion (A).
Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation for Assertion (A).
Only Assertion (A) is correct.
Both Assertion (A) and Reason (R) are not correct.
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Solution
Only Assertion (A) is correct.
Explanation:
The Assertion (A) is correct because intangible assets are defined as identifiable non-monetary resources that lack physical substance, such as patents, trademarks, and computer software. However, the Reason (R) is completely false. Under Schedule III of the Companies Act, 2013, intangible assets provide long-term economic value and are therefore classified under Non-current Assets (specifically under the sub-head Property, Plant and Equipment and Intangible Assets), never under Current Assets.
