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In accounting, the term impairment refers to Multiple choice question. offsetting liabilities against the related assets. allocation of an asset over its service life. cost recovery of an asset for investment purposes. an asset's significant decline in value.

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In accounting, the term impairment refers to  an asset's significant decline in value.

What is impairment?

Impairment is when the value of an asset is permanently reduced on the company's balance sheet. When an asset is tested for impairment, its book value is compared to the benefits and cash flows. If the book value is greater than all the benefits of the asset, the asset is impaired and its value is reduced on the balance sheet.

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