Asset impairment Describe what is meant by asset impairment and explain where inherent risks related to asset impairment stems from
Asset impairment deals with management's recognition that a significant portion of fixed assets is no longer as productive as had originally been expected. When assets are so impaired, the assets should be written down to their expected economic value.
? Normally, management is not interested in identifying and writing down assets.
? Sometimes, management wants to write down every potentially impaired asset to a minimum realizable value.
? Determining asset impairment, especially for intangible assets, requires a good information system, a systematic process, good controls, and professional judgment.
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