Chapter 12, Problem 12.5BE

Indefinite-Life Intangible Asset Impairment. Genius Auto Malls recently conducted its annual impairment review of the value of its trademark (an indefinite-life intangible asset), which it currently carries at $2,500,000. Evidence indicates that the trademark may be impaired. Genius estimates the future cash flows related to the trademark for the next 5 years as follows:

Future Period	Cash-Flow Projection
Year 1	$ 800,000
Year 2	700,000
Year 3	460,000
Year 4	140,000
Year5	100,000
Total	$2,200,000

The company estimates that the fair value of the trademark is $1,700,000. Determine whether the trademark is impaired. If so, what is the amount of the impairment loss?