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.

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