When an intangible asset becomes worthless,
A)it should remain on the books at its existing carrying value.
B)its remaining carrying value should be written off immediately as a loss.
C)prior years' accounting records should be adjusted retroactively.
D)its remaining carrying value should be amortized over 20 years.

Question

Quizplus · Accepted Answer

When an intangible asset becomes worthless, its remaining carrying value should be written off immediately as a loss. This is because intangible assets are not physical assets and cannot be valued as easily as tangible ones. Therefore, if an intangible asset is no longer providing any value, it should be removed from the company's financial statements by writing it off as a loss. The loss should be recognized in the income statement and the balance sheet, and the asset should be removed from the books.

When an Intangible Asset Becomes Worthless