Technical definition
A write-down recognized when an asset's carrying amount is no longer recoverable under the applicable rules.
How it works
Indicators such as damage, obsolescence or deteriorating performance trigger an assessment. The measurement and possible reversal depend on the reporting framework and asset type.
Everyday example
A specialized machine loses its only customer contract, reducing expected future benefit below its carrying amount.
Common pitfall
Impairment is not routine depreciation; it responds to a specific loss of expected benefit.