Royal Inc. is a private corporation following ASPE. On January 2, 2019, they purchased a customer list for $ 60,000. This customer list has a ten-year life and is not renewable. Straight-line amortization will be used. On December 31, 2020, Royal estimates that the undiscounted net cash flows of this customer list are $ 46,000 and the value in use (discounted net future cash flows) of this list is $ 42,000. There are no estimated costs to sell the list, as it will not be sold, and the fair value is equal to its value in use.

Instructions a) Determine if the customer list is impaired. Explain briefly. 

Prepare the adjusting entry required to record the impairment loss (if any).

Answer rating: 100% (QA)

A they purchased a customer list for 60000 discounted net future cash flows 42000 the fair value is ... View the full answer