It is the process by which business entities determine whether the value of an intangible asset (on the balance sheet) is higher or lower than the fair market value. If the book value of the intangible asset is higher than the future cash flow or benefit of the asset, it means the asset is impaired and the book value has to be adjusted accordingly. Intangible assets with definite lives are amortised while those with indefinite lives are not amortised but tested annually for impairment. Under the International Financial Reporting Standards (IFRS), business entities are required to test intangible assets for impairment at least annually.