Impairment puts balance sheets to the test
Abstract: One challenge that companies face today is identifying assets acquired before the global financial crisis that have since declined in value. Once identified, management must quantify and report the amount of impairment. But estimating and reporting impairment is a complex process, and many in-house accounting personnel lack the requisite training to test for asset impairment — or to provide testing that can withstand outside scrutiny. This article provides an overview of impairment and shows why it’s imperative to hire a credentialed appraiser to get impairment testing done right. A sidebar looks at common impairment testing pitfalls.