Peter Gordon, Ltd., an IFRS reporter, is in the process of assessing the valuation of its intangible assets. At the end of the current year, management reported the following intangible assets:

The firm acquired the franchise two years ago and estimates that it has a five- year useful life with no residual value. The permit is renewable every three years, for an indefinite period of time. Peter Gordon€™s management is concerned about the value of its franchise. Sales of the products sold under the franchise agreement have declined over the past two years, prompting the company to test for impairment. The firm classifies the trademark and the renewable permit as indefinite- life intangible assets and is required to test them for impairment on an annual basis. Management provides the following estimates related to each of its intangible assets:

Required
a. Conduct an impairment test for Peter Gordon€™s intangible assets.
b. Prepare the journal entries required to record the impairment loss, if any.
c. Compute the amount of the annual amortization for the franchise for years subsequent to the impairment test.

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Description Cost Accumulated amortization Net book value at year end Trademark Franchise Permit S600,000 $530,000 $180,000 0 $180,000 f0) O》 1212.000) S318000 180.000 $600,000 Trademark Franchise Pemit Fair value Costs to sell Fair value less costs to sell Value in use $560,000 7000 $290,000 $181,000 2,000 179,000 5,000 553,000 285.000 1,000 50,000 280,000 1000