In accounting, impairment is a permanent reduction in the value of a company asset. It may be a fixed asset or an intangible asset. When testing an asset for impairment, the total profit, cash flow, or other benefit that can be generated by the asset is periodically compared with its current book value. If the book value of the asset exceeds the future cash flow or other 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. Impairment is most commonly used to describe a drastic reduction in the recoverable value of a fixed asset. An asset's carrying value, also known as its book value, is the value of the asset net of accumulated depreciation that is recorded on a company's balance sheet.Become a supporter of this podcast: https://www.spreaker.com/podcast/investment-terms--4432332/support.

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