Concept explainers
Indefinite-Life Intangible Asset Impairment. Genius Auto Malls recently conducted its annual impairment review of the value of its trademark (an indefinite-life intangible asset), which it currently carries at $2,500,000. Evidence indicates that the trademark may be impaired. Genius estimates the future cash flows related to the trademark for the next 5 years as follows:
Future Period | Cash-Flow Projection |
Year 1 | $ 800,000 |
Year 2 | 700,000 |
Year 3 | 460,000 |
Year 4 | 140,000 |
Year5 | 100,000 |
Total | $2,200,000 |
The company estimates that the fair value of the trademark is $1,700,000. Determine whether the trademark is impaired. If so, what is the amount of the impairment loss?
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Chapter 12 Solutions
Intermediate Accounting
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