An asset is said to be impaired when its carrying value exceeds its recoverable amount.

Question

Quizplus · Accepted Answer

An asset is considered impaired when its carrying value (the amount shown on the balance sheet) is higher than its recoverable amount (the higher of its fair value or its value in use, which is the present value of expected future cash flows from the asset). In such cases, the asset needs to be written down to its recoverable amount, and a corresponding impairment loss is recognized in the income statement.

An Asset Is Said to Be Impaired When Its Carrying