Which of the Following Is the Impairment Test for Indefinite-Life

question 89

Multiple Choice

Which of the following is the impairment test for indefinite-life intangibles?

• A) recoverability test and then fair value test
• B) fair value test and then recoverability test
• C) recoverability test
• D) fair value test

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Definitions:

Residual Value

The estimated value that an asset will have at the end of its useful life, after considering depreciation or amortization.

Useful Life

The estimated duration of time over which an asset is expected to be functional and contribute to a company's operations.

Average Rate of Return

A financial metric that assesses an investment's profitability by dividing the annual average profit by the initial cost of investment.

Capital Investment Proposals

Proposals for projects or investments that require significant amounts of capital, analyzed for potential return and risk.