Dear Admin,
Do you mind to explain to me in detail, what actually is impairment gain / losses ?
If we included this into the Net Profit, how does this impact us from reviewing a company ?
Thank you
Soo
2 Answers
During the annual audit, auditors will “test” the asset for impairment, which usually means reducing the value of the asset based what is reflected currently (such as previous cashflow projections against the current status).
Impairment is not a cash transaction like depreciation, so it might hide good earnings otherwise.
Thanks JR
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