Intermediate Financial Accounting II
Impairment testing is a process used to determine whether an asset's carrying amount exceeds its recoverable amount, indicating that the asset may be impaired and should be written down. This is crucial for maintaining accurate financial reporting and ensuring that assets are not overstated on the balance sheet. Impairment testing involves evaluating both tangible and intangible assets, including goodwill, to ensure they are appropriately valued and that any potential loss in value is recognized in a timely manner.
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