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What amount should be recognized as impairment loss

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Question - On January 1, 2019, Christine Company acquired a trademark for P3,000,000. The trademark has eight years remaining in the legal life. It is anticipated that the trademark will be renewed in the future indefinitely without problem. On December 31, 2019, the trademark is assessed for impairment. Because of a decline in economy, the trademark is expected to generate cash flows of just P120,000 annually. The useful life of the trademark still extends beyond the foreseeable horizon. The appropriate discount rate is 6%. What amount should be recognized as impairment loss on trademark for 2019?

A. 1,000,000

B. 2,000,000

C. 3,000,000

D. 0

Reference no: EM132567839

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