What total amount should be recognized as impairment loss

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Question - On December 31, 2020 a company showed the following intangible assets: trademark, P4,800,000; patent, P2,400,000. The trademark has 10 years remaining in the legal life. However, it is anticipated that the trademark will be routinely renewed in the future. Thus, the trademark is considered to have an indefinite life.

Because of an inflationary economy, the trademark is expected to generate cash flows of P160,000 per year. The appropriate discount rate is 8%.

The patent has a remaining economic life of 6 years. It is expected that the patent will generate cash flows of P400,000 per year. The appropriate discount rate is also 8%.

What total amount should be recognized as impairment loss in 2020?

Reference no: EM132978081

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