Impairment of a long-term operating asset occurs when ________.
A) the carrying value of the asset is systematically reduced over its useful economic life
B) there is a failure to meet the legal obligations or conditions of a loan by which that asset was acquired
C) an asset or part of an asset is removed from the asset portfolio
D) an asset's total future cash-generating ability falls below its carrying value

Question

Quizplus · Accepted Answer

Impairment occurs when an asset's total future cash-generating ability falls below its carrying value, indicating that the asset is not expected to recover its book value through use or sale.

Impairment of a Long-Term Operating Asset Occurs When ________