- Understand the requirements for impairment testing. - Explain how and when to test intangible assets for impairment. - Analyze the external factors regarding impairment testing. - Consider the financial statement effects of impairing an intangible asset. Read the article "Explained: Why Toylor Swift is re-recording her studio albums, and what it says about copyright bottles with mega music labels" by Rhea Rao from November 16, 2021 posted with the assignment, Use the information from the article, the ASC, and any other reliable sources to answer the questions below. Concepts a. Refer to ASC 350 - Intangibles. What are the categories of intangible assets? In which category of intangible assets would a purchased copyright belong? b. Explain the accounting treatment for purchased intangibles. How are they initially measured? How are they subsequently measured? Provide your response for each of the three broad categories of intangible assets. c. Based on your answer in part a, how would a purchased copyright be tested for impairment? d. What general factors should be considered to determine if testing should be done? e. If testing should be done, what steps are required? f. Are previous impairments ever reversed? Process g. Set up one T-account for Shamrock Holdings' Taylor Swift copyright (assuming they allocated $300 million to the asset). a. Assume that Taylor's life expectancy is 50 years from today. What adjusting journal entry would Shamrock record at the end of the first year of owning the copyright? b. Update the T-account to reflect the journal entry. Analysis h. Taylor Swift owns the composition copyright, but not the master (sound recording) copyright to her early albums. In November 2020, Taylor began re-recording her early albums. For the new recordings, Taylor will own the composition rights and the master rights, For syndication purposes, Taylor is able to grant the use of the new recordings - prohibiting the commercial use of the old recordings. How will this impact the value of the copyright owned by Shamrock Holdings? i. What factors would you consider in your recoverability test? Do you believe impairment testing is necessary? j. Do you believe the impairment test would indicate a write down is necessary? Why or why not? k. Record the journal entry to impair the copyright assuming the undiscounted sum of future net cash inflows is expected to be $50 million. How would this impact Shamrock's financial statements? 1. Assume that you are the CEO of Shamrock Holdings. Prepare a short letter to the shareholders explaining the need for the write down