nedskrivnings
Nedskrivnings, a Swedish term, translates to impairment in English. It refers to a reduction in the value of an asset on a company's balance sheet. This reduction occurs when the asset's carrying amount, its book value, is deemed to be higher than its recoverable amount. The recoverable amount is typically the higher of the asset's fair value less costs to sell or its value in use.
Impairment testing is a crucial accounting process, especially for intangible assets like goodwill, patents, and trademarks,
The recognition of an impairment loss leads to a decrease in the asset's value on the balance