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On January 1, 2011, Dillman Inc.purchased a patent with a cost €3,480,000, a useful life of 5 years.The company uses straight-line depreciation.At December 31, 2012, the company determines that impairment indicators are present.The fair value less costs to sell the patent is estimated to be €1,620,000.The patent's value-in-use is estimated to be €1,695,000.The asset's remaining useful life is estimated to be 2 years.
-Bingham's 2012 income statement will report Loss on Impairment of

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The carrying value of the patent at December 31, 2012 is €2,088,000 (3,480,000/5 * 2). The fair value less costs to sell is €1,620,000. The impairment loss is €468,000 (2,088,000 - 1,620,000).

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