An indefinite-lived trade name is not run through the held-and-used undiscounted-cash-flow screen merely because both are called long-lived assets. Its applicable model compares the controlled asset or permitted unit with supported fair value after the relevant qualitative or quantitative path is selected.
If a supplied $900,000 carrying amount exceeds a supplied $760,000 fair value, the bounded loss is $140,000. The calculator does not establish the asset unit, indicator, qualitative conclusion, valuation technique, market assumptions, or reversal policy.
After the entry, the life conclusion is reassessed separately. Impairment does not automatically make the asset finite-lived, and indefinite classification does not shield it from loss recognition.
Apply the distinction
A $900,000 trade name and $760,000 supplied fair value produce a $140,000 loss under the declared asset-level model. The subtraction does not establish the unit, qualitative conclusion, or valuation inputs.
Authority
Read ASC 350-30-35-18 for annual and event-driven impairment testing for an indefinite-lived intangible.
Put the concept to work
Apply this concept
- Measure a bounded indefinite-lived intangible impairment from supplied carrying amount and fair value while preserving qualitative-screen, grouping, and valuation boundaries.
Learning resources
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Build on these ideas
- Indefinite-lived intangible asset — Analyze
To apply this concept: Required. The impairment route depends on the supported indefinite-life classification.