Question

The impairment entry reduces both net income in the income statement and total assets in the...

The impairment entry reduces both net income in the income statement and total assets in the balance sheet by the amount of the impairment loss.

true or false

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Answer #1
ANS TRUE
When the fair value of assets falls below the book value, assets are considered to be impaired
write-off due to an impairment loss is dedited to loss from impairment.Loss from impairment is appearing on the income statement as expenses  
So Loss from Impairment reduces net income
As part of the same entry, Credit is made to Assets A/c or provison for Impairment losses which reduces asset Value
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