Devo Co. has an indefinite-life intangible asset with a carrying value of $783,000. The undiscounted future cash flows expected to be realized from that asset total $830,000; the discounted cash flows are $574,000; and the fair value of the asset has been determined to be $657,000. What is the new carrying value of the asset after the impairment loss has been recorded?
A) $830,000
B) $657,000
C) $574,000
D) $126,000

Question

Quizplus · Accepted Answer

The carrying value of an indefinite-life intangible asset is reduced to its fair value if it is impaired. Since the fair value is $657,000, the new carrying value after recording the impairment loss is $657,000.

Devo Co Has an Indefinite-Life Intangible Asset with a Carrying Value