How does an asset impairment loss impact a company's financial statements?
A)Raises expenses and lowers both revenue and net income.
B)Lowers assets,stockholders' equity,and net income.
C)Raises expenses and lowers net income with no effect on any other items.
D)Raises liabilities and lowers stockholders' equity.

Question

Quizplus · Accepted Answer

An asset impairment loss lowers the value of the asset, which in turn reduces total assets on the balance sheet. This reduction in assets will also decrease stockholders' equity because the asset is no longer worth as much as it was before. Additionally, because the loss reduces net income, it will also decrease retained earnings.

How Does an Asset Impairment Loss Impact a Company's Financial