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The difference in testing for impairment of a finite-life versus indefinite-life intangible asset is: Multiple Choice The measure of an impairment loss for an indefinite-life intangible assets is not based on book value. Subsequent recovery of an impairment loss is allowed for a finite-life intangible asset. The cash flow recoverability test is omitted for an indefinite-life intangible asset. Companies are not required to recognize impairment losses on finite-life intangible assets.

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Answer:

c. The cash flow recover ability test is omitted for an indefinite life intangible asset

Explanation:

The difference in testing for impairment of a finite-life versus indefinite-life intangible asset is the cash flow recover ability test is omitted for an indefinite life intangible asset. The cash flow recover ability test is omitted from the Indefinite life intangible asset because most of the it meet this test easily since their cash flow occur for indefinite life. Whereas under definite life tangible asset, this test is used since their cash flow is limited to some years only.

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