Question

Also, is it true that intangible assets are valued at lower of carrying value or estimated...

Also, is it true that intangible assets are valued at lower of carrying value or estimated future cash flows?

Homework Answers

Answer #1

Answer---True

.

Intangible assets are valued at carrying amount and if there is any expectation that the future cash flow is lower than carrying amount then carrying amount is reduced to amount of future cash flows.

Intangible asset is impaired if Future cash flows is lower than book value of carrying amount of asset.

Like in the case of a trademark or patient, If future expected cash flow is reduced to an amount lower than carrying value then impairment is recorded.

So in short intangible assets are valued at lower of carrying value or estimated future cash flows.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
In the recoverability test for impairment of tangible/definite-life intangible assets, why is it that the estimated...
In the recoverability test for impairment of tangible/definite-life intangible assets, why is it that the estimated future cash flows are compared to the carrying value of the asset as opposed to the fair value of the asset? Is it because assets are generally reported at carrying value costs as opposed to fair value costs?
Which assets end up in lower-valued uses?
Which assets end up in lower-valued uses?
24. Intangible assets have no value and are not listed on a company’s balance sheet. These...
24. Intangible assets have no value and are not listed on a company’s balance sheet. These assets are for internal company purposes only and are reviewed by company management. a. true b. false
With respect to identifiable intangible assets other than goodwill, which of the following is true? Multiple...
With respect to identifiable intangible assets other than goodwill, which of the following is true? Multiple Choice If the value of the identified asset meets a de minimis exception, the entity may elect to treat it as goodwill. An identifiable intangible asset with an indefinite useful life must be assessed for impairment once every three years. If the average fair value of the asset is less than the average carrying amount of the asset with respect to, and determined for,...
explain going-concern value factors: 1- extra earning power 2-intangible assets 3- value of future investment
explain going-concern value factors: 1- extra earning power 2-intangible assets 3- value of future investment
What is the difference between tangible and intangible assets? What is difference between fair value and...
What is the difference between tangible and intangible assets? What is difference between fair value and market value? What is Goodwill? Why is it difficult to determine its true value?
Are impaired intangible assets measured by fair value or net realizable value?
Are impaired intangible assets measured by fair value or net realizable value?
Chicklet Corp owns a copyright with a carrying value (i.e. book value) of $63,000.   The copyright's...
Chicklet Corp owns a copyright with a carrying value (i.e. book value) of $63,000.   The copyright's fair value is $55,000. Chicklet estimates future undiscounted future cash flows from the copyright are $65,000, and future discounted future cash flows are $56,000.   Is the copyright impaired and if so, by how much? Select one: Yes, impaired by $7,000 Yes, impaired by $8,000 No, the copyright is NOT impaired Yes, impaired by $2,000
Intangible assets can be a substantial source of value to an acquiring firm. Which of the...
Intangible assets can be a substantial source of value to an acquiring firm. Which of the following are not considered intangible assets? a.Patents and technical know-how b.Warranty obligations and contingent payment claims c.Trademarks and customer lists d.Covenants not to compete and franchises e.Copyrights and software
The following information concerns the intangible assets of Epstein Corporation: On June 30, 2018, Epstein completed...
The following information concerns the intangible assets of Epstein Corporation: On June 30, 2018, Epstein completed the acquisition of the Johnstone Corporation for $2,540,000 in cash. The fair value of the net identifiable assets of Johnstone was $2,150,000. Included in the assets purchased from Johnstone was a patent that was valued at $94,400. The remaining legal life of the patent was 13 years, but Epstein believes that the patent will only be useful for another eight years. Epstein acquired a...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT