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Video: FAR Intangible Asset Impairment Test (Finite Life)

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Von writes in: In the FAR section of the CPA Exam, why is there an impairment test for intangible assets with finite lives? Don't we just amortize them?

Yes, you amortize them, however, if the carrying value of the asset if it now exceeds the fair value … So the carrying value on the books is now greater than the fair value, then you have to write it down and take the impairment charge.

So and you need to test for impairment at least once a year.

But you are correct.

You amortize it but you still have to test for impairment.

I hope that's helpful.

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