Impairment
An accounting reduction in carrying value when the applicable impairment test requires it. Under IFRS IAS 36, carrying value is compared with recoverable amount at the relevant asset or cash-generating-unit level; other frameworks and assets can have different tests.
Impairment in round numbers
Hypothetical, in US$ millions: goodwill has a carrying balance of 10 and the applicable test supports an impairment loss of 4 allocated to it. The remaining goodwill is 6, not zero. Missing a growth target alone does not establish that loss, and goodwill is recognized through acquisition accounting rather than purchased as a separate item.
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| Measure | Amount |
|---|---|
| Opening goodwill | 10 |
| Supported impairment loss | 4 |
| Remaining goodwill | 10 − 4 = 6 |
Source: IFRS IAS36: Impairment of Assets.
Terms Related to Impairment
Goodwill · NOL · Purchase price allocation · All of the glossary