Impairment

CFA Level I Glossary

Impairment is a write-down when an asset’s carrying amount exceeds its recoverable amount. The loss reduces earnings and the asset’s book value. Under IFRS, many impairments can reverse if value recovers, but goodwill impairment does not reverse. US GAAP impairment reversal rules differ for many long-lived assets. Treating every write-down as permanent under both standards is a trap.

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