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Sagot :
Impairment losses are not recognized on cost method investments.
What exactly is an impairment loss?
When an asset's fair value decreases, an impairment loss is a recognised decrease in the asset's carrying amount. The difference is written off when an asset's fair value falls below its carrying value. Impairment typically involves an abrupt reduction in value. It may occur from unforeseen causes like a financial catastrophe or natural calamity. Depreciation is the anticipated decline in market value brought on by ordinary wear and tear. For instance, once an automobile leaves the dealership, it automatically depreciates.
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