At the beginning of the current year, Milk Tea Company acquired a trademark for P2,000,000. The trademark has a remaining legal life of 8 years. It is anticipated that the trademark would be routinely renewed in the future. The trademark is expected to generate cash flows of P150,000 per year and the appropriate discount rate is 10%. However, the trademark was tested for impairment and there is a need to be recognized at the end of the year. How much is the impairment loss at the end of the year?
At the beginning of the current year, Milk Tea Company acquired a trademark for P2,000,000. The trademark has a remaining legal life of 8 years. It is anticipated that the trademark would be routinely renewed in the future. The trademark is expected to generate cash flows of P150,000 per year and the appropriate discount rate is 10%. However, the trademark was tested for impairment and there is a need to be recognized at the end of the year. How much is the impairment loss at the end of the year?
Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization
Section: Chapter Questions
Problem 62P
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At the beginning of the current year, Milk Tea Company acquired a trademark for P2,000,000. The trademark has a remaining legal life of 8 years. It is anticipated that the trademark would be routinely renewed in the future. The trademark is expected to generate cash flows of P150,000 per year and the appropriate discount rate is 10%. However, the trademark was tested for impairment and there is a need to be recognized at the end of the year. How much is the impairment loss at the end of the year?
P2,000,000
P500,000
P150,000
P300,000
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