QUESTION 14 OF 30

What is an impairment of a fixed asset and what is the accounting treatment?

An asset impairment occurs when there is a drop in the fair value of an asset below its recorded cost. The accounting treatment is to write off the difference between the fair value and the recorded cost of the asset. Impairment occurs when the decline in value is not recoverable.

"Impairment of fixed assets occurs when the fair value of owned fixed assets drop below the carrying amount of the asset on the balance sheet. When this happens, a write-off of the difference is recorded. It is important to periodically assess whether material fixed assets are impaired to the point where the value cannot be recovered."

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Fixed Asset Accountant Mock Interview

What is an impairment of a fixed asset and what is the accounting treatment?

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30 Fixed Asset Accountant Interview Questions & Answers