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Wildhorse Inc. purchased a non - renewable licensing agreement for access to proprietary technology that allows it to produce bio - char from organic waste.

Wildhorse Inc. purchased a non-renewable licensing agreement for access to proprietary technology that allows it to produce bio-
char from organic waste. When the 10-year licensing agreement was purchased 6 years ago there were no other companies operating
in the space. However, numerous competitors have emerged in the industry as direct competitors to Wildhorse Inc. As a result of
recent market entrants, the market demand for its bio-char products has been steadily declining. The company has the following
information available related to the licensing agreement:
Licensing agreement at Cost $128,100
Estimated Useful Life
10 years
Salvage Value
$0
Wildhorse Inc. is currently testing this asset for impairment. While the licensing agreement could currently be sold for $39,100,
Wildhorse Inc. plans to keep producing the bio-char two more years. It expects net cash flows from production to be $18,000 yearly
and that it can sell the licensing agreement for $7,700 at the end of year two. The current interest rate is 5%.
Assume that Wildhorse Inc follows ASPE and uses the cost recovery impairment model. Calculate the carrying amount and recoverable amount
Carrying amount of the licensing agreement $
Recoverable amount$
B) what is the value of the impairment loss ?(Round answer to 0 decimal places
Impairment loss $

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