Long Lived Asset Impairment
Long lived asset impairment refers to the decrease in value of a tangible asset that is expected to provide economic benefits over a long period of time. This impairment occurs when the carrying amount of the asset exceeds its recoverable amount, which is the higher of its fair value less costs to sell or its value in use. Impairment of long lived assets is recognized in the financial statements as a loss, reducing the asset's carrying amount to its recoverable amount. This impairment can be caused by various factors such as physical damage, obsolescence, changes in market conditions, or a decrease in demand for the asset's products or services. Proper assessment and recognition of long lived asset impairment is important for accurate financial reporting and decision-making.