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An impairment loss is a recognized reduction in the carrying amount of an asset that is triggered by a decline in its fair value. Impairment describes a reduction in the value of a company asset either fixed or intangible so as to reflect a decline in the quality quantity or market value of the asset. Impairment Vs Depreciation All You Need To Know Learn Accounting Accounting And Finance Financial Management Impairment in accounting is a permanent value reduction of a companys assets. . An increase in the value of an asset is called appreciation. IAS 36 defines the recoverable amount of an asset. Impairment financial reporting An impairment cost must be included under expenses when the book value of an asset exceeds the recoverable amount. An asset impairment arises when there is a sudden drop in the fair value of an asset below its recorded cost. In accounting impairment is the diminishing in quality strength amount or va