Main sources of intangible assets include:

• A. A Purchased intangible assets only
• B. B Internally generated assets only
• C. C Purchased and internally generated assets
• D. D Intangible assets are not recognised

Answer: (C)

Intangible assets can come from two main sources: external acquisitions and internal generation. Purchased (externally acquired) intangible assets are obtained from outside the business, such as patents, licenses, software, or brands acquired in a transaction. Internally generated assets arise from the company’s own development or other internal activities; under accounting standards, some development costs can be capitalized if criteria are met (future economic benefits are probable and costs can be measured reliably), while research costs are typically expensed. Because intangible assets may be either bought or developed internally, the correct understanding is that both routes exist. Saying they aren’t recognised at all is incorrect, since recognition is allowed when the asset meets the criteria, and ignoring either source would overlook common examples like software licenses (purchased) or internally developed software (internally generated).