Response to the following problem:
Tradename
Probst Company acquired a tradename several years ago at a cost of $60,000. The company has never considered the tradename to be impaired. However, at the end of 2010, the company has determined that the tradename is impaired because of a change in market conditions. It estimates that the tradename has a fair value of $40,000 at the end of 2010.
Required
1. Prepare the journal entry (if any) for Probst Company to record the impairment of its trademark at the end of 2010.
2. Suppose, instead, that Probst Company estimated that the tradename had a fair value of $70,000 at the end of 2010. How would Probst account for this if it were using (a) U.S. GAAP, or (b) IFRS?