Under IFRS, how are intangible assets with indefinite useful lives tested for valuation?
AWritten off completely in the year of acquisition
BTested annually for impairment, not amortized
CAmortized over a mandatory 20-year period
DAmortized using the straight-line method
Explanation
* Under IAS 38 / IFRS rules, intangible assets with indefinite useful lives (e.g., goodwill, brand names) are not amortized.
* They must be tested for impairment annually or whenever impairment indicators arise.
* If recoverable amount drops below carrying amount, an impairment loss is recognized immediately.
Exam Relevance
- Topic: Financial Accounting
- Subtopic: Intangible Assets (IAS 38)
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