CERTYNEX IFRS ACADEMY

Aquilon performs the impairment test of a distribution licence with an indefinite useful life every November. In June 20X2, its main customer, which accounts for most of the sales made under the licence, terminates its contract, which is an indication of impairment. The controller proposes to wait for the November test. What should be done?

Wait until November: for an asset with an indefinite life, only the annual test is required.

Test the licence as soon as the indication arises in June, and also perform the annual test.

Do nothing this year: a test performed in June would exempt the entity from any other test until 20X3.

Start amortising the licence from June to reflect the loss of the customer.