Under what circumstances should a company record an asset impairment loss?
A)When residual value is greater than the repairs and maintenance expenses needed to keep up the asset.
B)When book value is less than the residual value of the asset.
C)When Accumulated Depreciation equals the purchase cost of the asset.
D)When book value is greater than the fair value of the asset.

Question

Quizplus · Accepted Answer

Impairment occurs when events or changed circumstances interfere with a company's ability to recover the value of the asset through future operations.If this occurs,the book value should be written down to what the asset is worth (called fair value)with the amount of the write-down reported as an impairment loss.

Under What Circumstances Should a Company Record an Asset Impairment