Accounting for IGCSE & O level - Final Statements (Section 8 - No. 25)
When is an asset considered impaired, and how is it handled in the financial statements?
When the asset's market value increases; it is revalued upwards.
When the asset's book value exceeds its recoverable amount; it is written down.
When the asset is fully depreciated; it is removed from the balance sheet.
When the asset is used for more than its useful life; it is written off.
स्पष्टीकरण
Impairment occurs when the recoverable amount (the higher of fair value less costs to sell and value in use) is less than the asset's book value, requiring a write-down.