CERTYNEX IFRS ACADEMY

The Brindor group holds a trade name acquired for a range of biscuits, with a carrying amount of 600,000, not amortised because its useful life was judged indefinite. In December 20X4, the board decides to discontinue the range and stop using the name in 3 years, with no residual value. The test under IAS 36 shows a recoverable amount of 650,000. Which treatment should be adopted?

Keep the indefinite life as long as the name is used, and simply continue the annual test until the range is discontinued.

Restate prior periods as if the name had always had a finite life, then amortise the balance over 3 years.

Recognise the change to a finite life, with no impairment loss given the test, then amortise 200,000 per year over 3 years.

Derecognise the trade name immediately, since its use will come to an end.