Discuss the valuation relevance of asset impairment recognition. (Cite related research).
Recognition of asset impairment is an accounting mandate that is alleged to improve the relevance and reliability of financial information.
Recognition of asset impairment improves the relevance and reliability of financial information. The reason for this is that if the asset as shown in the balance sheet is shown at a value higher than its value to the company, the asset is shown at an inflated amount To improve the relevance and reliability of financial information the amount shown in the balance sheet must be reduced. In other words this means that the asset has become less useful than what it was when it was purchased. This reduction in value ...
The following posting helps with an accounting problem. It discusses the recognition of asset impairment.