Homework Answers
Answer:- Annual impairment test.
For indefinite life intangibles an annual impairment test will be done to find any impairment in intangible assets.
Impairment= Carrying amount - Recoverable Amount.
Indefinite life intangibles are not amortized because there is no foreseeable limit to the cash flows generated by those intangible assets. Instead of amortization, indefinite-life assets are evaluated for impairment yearly. If an impairment has occurred, then a loss must be recognized.
Some examples of indefinite life intangibles are goodwill, frenchise etc.
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