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

question 118

Multiple Choice

Devo Co. has an indefinite-life intangible asset with a carrying value of $800,000. The undiscounted future cash flows expected to be realized from that asset total $828,000; the discounted cash flows are $578,000; and the fair value of the asset has been determined to be $647,000. What is the amount of the impairment loss to be recorded, if any?

• A) $222,000
• B) $153,000
• C) $28,000
• D) -0-

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Definitions:

Extinction

The process by which a previously learned behavior diminishes in frequency or disappears as a result of the absence of reinforcement.

Spontaneous Recovery

A phenomenon in classical conditioning where a previously extinguished response re-emerges after a period of non-exposure to the conditioned stimulus.

Psychodynamic

A psychological perspective that emphasizes the influence of the unconscious mind on behavior.

Humanistic

Relating to or supporting the principles of humanism, emphasizing the value and agency of human beings, individually and collectively.