At the end of 2020, Culver Corporation owns a license with a carrying amount of $504,000. Culver expects undiscounted future cash flows from this license to total $510,000. The license's fair value is $399,000 and disposal costs are estimated to be nil. The license's discounted cash flows (that is, value in use) are estimated to be $445,300. Assume that the license was granted in perpetuity and has an indefinite life, and that Culver prepares financial statements in accordance with ASPE. Assume that the license was granted in perpetuity and has an indefinite life.

(a)Determine if the license is impaired at the end of 2020.

The license

at the end of 2020.

Prepare any related entry that is necessary.

Account Titles and Explanation	Debit	Credit

Answer rating: 100% (QA)

The license is impaired at the end of 2020 because its carrying amount i... View the full answer