Asked by Emanuela Tigistu on Jul 17, 2024
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Impairment loss is the amount by which the carrying value of an asset or cash-generating unit exceeds its recoverable amount.
Impairment Loss
A charge applied to a company's income statement when the fair value of an asset drops below its carrying value on the balance sheet.
Carrying Value
The recorded book value of an asset in a company's financial statements, calculated as the original cost minus accumulated depreciation or amortization.
Recoverable Amount
The estimated amount that can be recovered from an asset's sale or use, typically higher than its net book value.
- Understand the concept of impairment loss and its calculation.
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Learning Objectives
- Understand the concept of impairment loss and its calculation.
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