Question
A subsidiary has previously unreported brand names valued at $50 million at the date of acquisition. The brand names have an indefinite life. It is
A subsidiary has previously unreported brand names valued at $50 million at the date of acquisition. The brand names have an indefinite life. It is now the end of the second year since acquisition, and you are consolidating the accounts. The subsidiary still owns the brand names. Impairment testing reveals that the brand names were impaired by $5 million in the first year and $7 million in the second year. The amount by which the brand names are recognized in eliminating entry (R) is:
A) $50 million
B) $38 million
C) $45 million
D) None since the brand names have an indefinite life
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