The net amount shown on a balance sheet for an intangible asset with an unlimited life should be:
A)the price for which it could be sold.
B)its acquisition cost or current market value,whichever is lower.
C)its purchase price minus accumulated depreciation.
D)its purchase price adjusted for inflation.

Question

Quizplus · Accepted Answer

Intangible assets with an unlimited life are not amortized but are tested annually for impairment. The net amount shown on a balance sheet for such an asset should be its acquisition cost or its current market value, whichever is lower. This approach ensures that the asset is not overstated on the balance sheet.

The Net Amount Shown on a Balance Sheet for an Intangible