Impairment loss意思

Impairment loss refers to a permanent decrease in the value of an asset that is recognized in the financial statements of a company. This decrease in value is typically due to damage, wear and tear, obsolescence, or some other factor that reduces the future economic benefits that the asset is expected to generate for the company.

When an impairment loss is recognized, the carrying value of the asset on the company's balance sheet is reduced to reflect its fair market value or the value that could be recovered from the asset. The impairment loss is recognized as an expense on the company's income statement, which can have a negative impact on the company's financial performance.

Impairment losses are most commonly associated with long-lived assets such as property, plant, and equipment, as well as intangible assets like goodwill. Companies are required to assess the value of these assets on a regular basis to determine if there are any signs of impairment. If an impairment loss is recognized, the company must also reassess the useful life and residual value of the asset to ensure that the asset is not being overvalued on the balance sheet.