When an asset is impaired,the firm reduces the asset's carrying value on the balance sheet and recognizes the decline in value ________.
A)as a loss from continuing operations on the income statement
B)as an extraordinary loss on the income statement
C)as an unrealized loss in other comprehensive income
D)as an realized loss in other comprehensive income

Question

Quizplus · Accepted Answer

When an asset is impaired, the firm recognizes the decline in value as a loss from continuing operations on the income statement. This is because impairments are considered to be permanent reductions in the value of the asset, rather than temporary fluctuations. Therefore, the loss is recognized as a normal part of the firm's ongoing business activities.

When an Asset Is Impaired,the Firm Reduces the Asset's Carrying