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(Solution) - Genius Auto Malls an IFRS reporter recently conducted its annual

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Genius Auto Malls, an IFRS reporter, recently conducted its annual impairment review of the value of its trademark (an indefinite- life intangible), which it currently carries at $ 2,500,000. Evidence exists that the trademark may be impaired. Genius estimates the future cash flows related to the trademark for the next five years as follows:
Future Period Cash Flow Projection
Year 1 ???????????? $ 800,000
Year 2 ???????????? 700,000
Year 3 ???????????... 460,000
Year 4 ???????????... 140,000
Year 5 ???????????... 100,000
Total $ 2,200,000
Present Value of Cash Flows $ 1,987,722
The company estimated that the fair value less costs to sell the trademark is $ 1,700,000. Determine if the trademark is impaired. If so, what is the amount of the impairment loss?


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This question was answered on: Jul 11, 2017

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