Impairment of Intangible Assets

A good summary would include a discussion minimum of approximately three paragraphs in length. No need to be an academic, write this so you understand and comprehend it, pretend you are explaining it to a friend. Have fun, take the opportunity to learn something new about intangibles and impairment!

Freds Company is considering the impairment of a limited life intangible asset because of its lack of profitability. Explain to the management of Freds how to determine whether an impairment write-off is permitted. Include the rules and tests required to determine if impairment exists, how they are applied, and how the impairment is recorded.