Question

Explain how losses on impaired intangible assets should be reported in income.

Short answer

Impairment losses are normally included in the "Other costs and losses column of income" from continuing operations.

Step-by-step solution

Loss on impaired intangible asset

When an intangible asset is regarded less value than what is reported on the balance sheet after amortization, it is said to be impaired.

How should it be reported?

It is reported in other costs and losses (column of income). Impairment losses (and the recovery of losses for assets to be disposed of) are similar to other operational expenditures.

As a result, profits (loss recoveries) on assets to be sold should be reported as income from ongoing activities.