Module V· Identifiable Intangibles in PPAAdvanced
Question

What are indefinite-lived intangibles, and what EPS advantage do they create?

Answer

Indefinite-lived intangibles are assets expected to generate benefits for an indefinite period, such as some brands or licenses. They are not amortized, so they do not create recurring amortization expense and therefore support higher EPS than finite-lived intangibles. The trade-off is annual impairment testing and potential lumpy impairment charges.