Which of the following statements about asset impairment is correct?
A)Asset impairment losses appear on a company's income statement every year.
B)When a company records an asset impairment loss,it will increase net income for that period.
C)Impairment occurs when an asset's book value is less than its current value.
D)Asset impairment losses are reported on the income statement as an operating expense.

Question

Quizplus · Accepted Answer

Impairment occurs when events or changed circumstances interfere with a company's ability to recover the value of the asset through future operations.If this occurs,the book value should be 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 and reported above the Income from Operations subtotal.

Which of the Following Statements About Asset Impairment Is Correct