Loren Company's balance sheet shows a trade name acquired as part of a business combination with a carrying value of $30 million. The trade name has an indefinite life and therefore Loren does not amortize it. Negative publicity regarding the product carrying the trade name has reduced its fair value to $24 million and its value in use to $22 million. The entry is as follows:
a. Loss on Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 8,000,000
Trade Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 8,000,000
b. Loss on Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 6,000,000
Trade Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 6,000,000
c. Loss on Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 4,000,000
Trade Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 4,000,000
d. Trade Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 6,000,000
Loss on Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000,000
e. Trade Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 8,000,000
Loss on Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000,000
B
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