Solution-Expense related to the license reported on the

Expense related to the license reported on the income

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Reference no: EM132418972

Problem: At the beginning of Year 1, Sports Gear Inc. (SGI) acquired a college apparel license at a cost of $28,000,000, excluding legal fees of $1,600,000 and registration fees of $400,000. The company estimated that the license would have a useful (legal) life of 15 years. For Question 3, assume that the fair value of the license at the end of Year 1, Year 2, and Year 3 is $26,600,000, $26,300,000, and $23,850,000, respectively.

Question: If the company determines that the license asset is impaired by $3,000,000 at the beginning of Year 3 what is the total amount of expense related to the license reported on the income statement for Year 3 under U.S. GAAP?

Reference no: EM132418972

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Expense related to the license reported on the income

Reference no: EM132418972

Reference no: EM132418972

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