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Asked by Jensen Watterson on Jun 26, 2024

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If the book value of an indefinite-lived intangible asset (e.g.,a brand name)exceeds the fair value,then the asset is considered impaired.

Indefinite-Lived Intangible

An intangible asset that has no foreseeable limit on the period over which it is expected to contribute to the cash flow of a business.

Fair Value

The estimated market price of an asset or liability, reflecting the amount for which it could be exchanged in a current transaction between willing parties.

Impaired

Refers to a reduction in the recoverable value of a fixed asset or goodwill below its carrying amount on the balance sheet.

  • Master the basic tenets of asset impairment.
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phakamani tshabanguJun 29, 2024
Final Answer :
True
Explanation :
When the book value of an indefinite-lived intangible asset exceeds its fair value, it indicates that the asset is not expected to generate future cash flows sufficient to recover its recorded value, thus it is considered impaired and must be written down to its fair value.

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