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Tutor, can you please tell me what is impairment in intangible asset and why there is always impairment loss not impairement gain?
Thank you.Your question is more relevant for Paper FA than for Paper FA.
It is impossible to place an exact value on intangible assets unless we have paid for them (which is why, for Paper FA, purchased goodwill and development costs (subject to the conditions) may be capitalised) and then amortised (depreciated).
However, even then it is impossible to place a value on them in the future. For example, we may think that the goodwill is worth more but we can never be sure of that unless we actually sold the business. Therefore for prudence we never increase the value (which would be an impairment gain) but only reduce the value if we think it is worth less (an impairment loss).
Again, this is really more for Paper FR than for Paper FA.
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