Conceptually, there is considerable merit for a policy requiring the write-down of an asset when there has been a significant decline in value below book value. The write-down provides important information about the future cash flows to be generated from the use of the asset. However, in practice this policy is very subjective. GAAP [FASB ASC 360] establishes guidance for when to recognize and how to measure impairment losses of property, plant, and equipment and intangible assets that have finite useful lives. GAAP [FASB ASC 350] also provides guidance for the recognition and measurement of impairment for indefinite-life intangibles and goodwill.

Which of the following statements are true regarding potential impairment of intangible assets with indefinite lives? (Select all that apply.)

A qualitative assessment must be undertaken at least annually.

This type of asset should be tested for impairment whenever events or changes in circumstances indicate that it is more likely than not that the asset is impaired.

If book value exceeds fair value, an impairment loss is recognized for the difference.

Recovery of impairment losses is permitted for this type of asset.