What is impairment of assets, and what are the related journal entries?

Question

Accepted Answer

Impairment of assets is the reduction in the value of a company's assets due to various reasons.

Impairment occurs when the carrying value of an asset exceeds its recoverable amount.
Journal entry for impairment involves debiting the impairment loss account and crediting the respective asset account.
Impairment can occur due to physical damage, obsolescence, changes in market conditions, etc.
Impairment testing is required annually for goodwill and intangible assets with indefinite useful lives.
Impairment can have a significant impact on a company's financial statements and should be carefully evaluated.

Accepted Answer

Impairment means asset becoming obsolete or non-useable due to its useful life is over or technological advancements.

Accepted Answer

Assets writter off account dr. and respective assets account credit

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