How does an asset impairment loss impact a company's financial statements?
A)Raise expenses and lower both revenue and net income.
B)Lower assets,shareholders' equity,and net income.
C)Raise expenses and lower net income with no effect on any other items.
D)Raise liabilities and lower shareholders' equity.

Question

Quizplus · Accepted Answer

An impairment loss decreases the value of the asset on the balance sheet, which consequently reduces the value of shareholders' equity as well. As a result, both assets and shareholders' equity decrease on the balance sheet. Additionally, the impairment loss is recognized as an expense on the income statement, which reduces net income.

How Does an Asset Impairment Loss Impact a Company's Financial