Definition of Impairment:
Impairment is commonly used to describe a drastic reduction in the recoverable amount of a fixed asset. Impairment may occur when there is a change in legal or economic circumstances surrounding a company or a casualty loss from unforeseen devastation.
The state or fact of being impaired, especially in a specified faculty.
In accounting, impairment describes a permanent reduction in the value of a company's asset, typically a fixed asset or an intangible asset. When testing an asset for impairment, the total profit, cash flow, or other benefit expected to be generated by that specific asset is periodically compared with its current book value. If it is determined that the book value of the asset exceeds the future cash flow or benefit of the asset, the difference between the two is written off and the value of the asset declines on the company's balance sheet.
A loss in revenue due to economical changes.
Synonyms of Impairment
Adulteration, Attrition, Curtailment, Cut, Cutting, Damage, Debilitation, Decrease, Decrement, Defectibility, Defectiveness, Deficiency, Depletion, Depreciation, Derogation, Deterioration, Detraction, Detriment, Diminution, Dip, Disadvantage, Disparagement, Drawback, Enfeeblement, Erroneousness, Extraction, Fallibility, Faultiness, Flaw, Handicap, Harm, Hurt, Immaturity, Imperfection, Impurity, Inaccuracy, Inadequacy, Inadequateness, Incompleteness, Inexactitude, Inexactness, Injury, Lack, Lessening, Liability, Loss, Loss of ground, Marring, Mediocrity, Mischief, Patchiness, Prejudice, Reduction, Remission, Retraction, Retrenchment, Shortage, Shortcoming, Shortening, Shrinkage, Sketchiness, Step backward, Truncation, Undermining, Undevelopment, Unevenness, Unperfectedness, Unsoundness, Vitiation, Want, Weakening, Worsening
How to use Impairment in a sentence?
- Impairment can occur as the result of an unusual or one-time event, such as a change in legal or economic conditions, change in consumer demands, or damage that impacts an asset.
- If impairment is confirmed as a result of testing, an impairment loss should be recorded.
- A degree of physical or mental impairment.
- Impairment exists when an asset's fair value is less than its carrying value on the balance sheet.
- An impairment loss records an expense in the current period which appears on the income statement and simultaneously reduces the value of the impaired asset on the balance sheet.
- Assets should be tested for impairment regularly to prevent overstatement on the balance sheet.
Meaning of Impairment & Impairment Definition