Intangible Asset Impairment Roi Inc. Is a Private Corporation Following ASPE. on Jan

Essay

Intangible asset impairment
Roi Inc. is a private corporation following ASPE. On Jan 2, 2020 they purchased a limited-life licence for $ 50,000. This licence has a ten-year life and is not renewable. Straight-line amortization will be used. At December 31, 2021, Roi estimates that the undiscounted net cash flows of this license is $ 38,000, and the fair value (discounted net future cash flows) of this licence is $ 32,000.
Instructions
a) Calculate the amount of impairment (if any) for this asset.
b) Prepare the adjusting entry required to reflect any impairment.