Pak Accounting Fixed Asset Impairment

An asset's impairment is the decrease in its fair value below its recording cost, which is unrecoverable. Impairment can be caused by events such as damage or goodwill. The decrease in fair value results in a decrease in asset value on the balance sheet and a loss on the income statement. The journal entry for impairment is a debit to the impairment expense account and a credit to the asset.

1. Have an impairment expense account in the Account Codes for the books that can record impairment. Run the Asset Account Code Listing found by clicking on the List button at the bottom of the screen. The listing will list your Impairment Expense Account along with other pertinent information.
   
2. Go to Fixed > Assets > Record Impairment.
3. Select the needed options
   1. Choose the Year and Book that will have the impairment.
   2. Choose whether to enter the Impairment Adjustment of the Impairment Value.
      
4. Click the Generate button.
5. The assets will populate the grid for you.
   • To record impairment values or adjustments, click in the needed field and enter the amount.
     
6. You can save a listing of the assets, export it to Excel, or save the list to a PDF file by clicking on the Options button at the bottom of the screen and selecting the option you want.
7. Click the Update button for the system to record the impairment on the assets. At this point, the G/L entries still have to be generated. The asset will also retain the impairment information on the book that the impairment was recorded on.
   
8. To create the GL Entries, go into Fixed Assets > #20 Create GL Entries, click on the Impairment button, and click on View to generate the entries.
   
   The entries can be viewed in View/Trend [F4].