Substantial impairment requires proof that goods are worthless.

Question

Quizplus · Accepted Answer

Substantial impairment refers to a decline in the value of an asset, but it does not necessarily mean that the asset is completely worthless. It is a subjective assessment made by the accounting entity based on factors such as market conditions, technological advances, and economic trends. If an asset is determined to be substantially impaired, the company will need to adjust the value of the asset on its financial statements.

Substantial Impairment Requires Proof That Goods Are Worthless