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3: (Intangible Impairment) The following information is for a copyright owned by Lighting Designs Corp.,...

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Accounting

3: (Intangible Impairment) The following information is for a copyright owned by Lighting Designs Corp., a private entity, at December 31, 2023. Lighting Designs applies ASPE. Cost $4,300,000 Carrying amount 2,150,000 Expected future net cash flows (undiscounted) 2,000,000 Fair value 1,600,000 Assume that Lighting Designs will continue to use this copyright in the future. As at December 31, 2023, the copyright is estimated to have a remaining useful life of 10 years. Instructions a) Prepare the journal entry, if any, to record the assets impairment at December 31, 2023. b) Prepare the journal entry to record amortization expense for 2024 related to the copyright. c) The copyrights fair value at December 31, 2024, is $2.2 million. Prepare the journal entry, if any, to record the increase in fair value. d) Digging Deeper. Using the information from part (a), discuss whether the copyright would be amortized in 2023 before the impairment test is conducted. Would the asset be tested for impairment before or after amortizing the copyright in 2023

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