Arvonalennuksiin

Arvonalennuksiin refers to the decrease in the value of an asset below its carrying amount on the balance sheet. This accounting concept is applied when an asset's recoverable amount is less than its book value. The recoverable amount is the higher of the asset's fair value less costs to sell and its value in use. A company must assess at each reporting date whether there is any indication that an asset may be impaired. If such indications exist, the company must estimate the asset's recoverable amount.

When an asset is impaired, the company recognizes an impairment loss in profit or loss for the period. This loss reduces the carrying amount of the asset to its recoverable amount. The carrying amount is then updated for future periods. Subsequent reversals of impairment losses are only permitted if circumstances have changed and the recoverable amount has increased, up to the amount that would have been determined had no impairment loss been recognized in prior periods.

Impairment testing is a critical part of financial reporting, ensuring that asset values on the balance sheet do not exceed their economic value. It impacts a company's profitability and financial position. Companies need robust processes to identify potential impairments and to accurately measure any resulting losses. This process is particularly relevant for long-lived assets such as property, plant, and equipment, as well as intangible assets like goodwill. Regular review is essential to reflect the true economic reality of an asset's worth.