What is the key treatment of intangible assets with indefinite useful lives under US GAAP?

Intangible assets with indefinite useful lives under US GAAP are not amortized, reflecting their lack of a determinable expiration date. Instead, they are required to be tested for impairment at least annually, or more frequently if there are indicators of potential impairment. This treatment acknowledges that these assets may maintain their value indefinitely unless certain circumstances lead to a decline in their fair value.

For example, a trademark that is expected to provide benefits over an indefinite period fits this classification. Since these intangibles do not depreciate over time in the same way physical assets do, the rigorous annual impairment testing ensures that the carrying amount of the intangible asset on the balance sheet does not exceed its fair value.

The incorrect options reference either strategies that imply a finite lifespan for intangible assets or suggest that they do not need to be recognized, neither of which applies to assets classified as having indefinite lives under US GAAP.