Impairment of Trademark Probst Company acquired a trademark several years ago at a cost of $60,000. Probst has never considered the trademark to be impaired. However. at the end of 2013. Probst has determined that the trademark is impaired because of a change in market conditions. It estimates that the trademark has a fair value of $40.000 at the end of 2013.

Required:

1. Prepare Probst's journal entry (if any) to record the impairment of its trademark at the end of 2013.

2. Next Level Assume Probst uses IFRS. If Probst estimates that the cost of selling the trademark is zero but the value-in-use is $45,000. Prepare Probst's journal entry to record the impairment of its trademark at the end of 2013. Explain any differences between the impairment loss calculated under IFRS and the impairment loss calculated under U.S GAAP.

3. Assume, instead, that Probst estimated that the trademark had a fair value of $70,000 at the end of 2013. How would Probst account for this if it were using (a) U.S. GAAP. or (b) IFRS?

Answer rating: 100% (QA)

1 P acquired a trademark for 60000 The journal entry for the same is given below Trademark ac 6000 T... View the full answer