In SFAS No. 121, both the recognition and measurement criteria for the impairment of asset event is based on the excess of the carrying value of the asset over its fair market value less costs of disposal.

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SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," requires that an impairment loss be recognized only if the carrying amount of an asset is not recoverable and exceeds its fair value. The impairment test is based on the recoverability of the carrying amount rather than directly comparing it to the fair market value less costs of disposal.