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

Question

Quizplus · Accepted Answer

When an impairment occurs,the book value is written down to what the asset is worth (called fair value)with the amount of the write-down reported as an impairment loss.Impairment losses are classified as an operating expense on the income statement.As a result,recording an asset impairment loss will decrease assets and increase expenses.The increase in expenses decreases both net income and stockholders' equity.

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