For governmental entities, a capital asset is considered impaired

Question

Quizplus · Accepted Answer

A capital asset is considered impaired when its service capacity has declined significantly and unexpectedly. This means that the asset is no longer able to perform its intended function and needs to be repaired or replaced. Impairment is not determined based on whether the asset is reported in a governmental fund or whether it generates cash flows. However, it may be considered impaired if it no longer generates the expected cash flows.

For Governmental Entities, a Capital Asset Is Considered Impaired