Impairment Loss
Accounting glossary · Understand, connect, apply
Under IAS 36, an impairment loss arises when an asset or cash-generating unit is carried above its recoverable amount. The loss reduces the carrying amount.
Example
A machine has a carrying amount of 48,000 and a recoverable amount of 39,000. Its impairment loss is 9,000, assuming IAS 36 applies.
Remember the difference
Depreciation allocates depreciable cost over useful life. An impairment test examines recoverability using the relevant rules and evidence.
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Published 9 November 2026. Prepared with AI assistance. Examples are fictional and simplified for learning.
Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.
Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.
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