Impaired Asset


Also found in: Wikipedia.

Impaired Asset

An asset with a market value less than its value listed on the company's records, especially when the value is unlikely to recover. The cash flow an impaired asset will generate is less than the difference between its market value and its book value. A company must write down the value of impaired assets once per year. Common impaired assets include accounts receivable, long-term assets, and, especially, good will.
References in periodicals archive ?
Bank of Scotland in early 2007 became aware that Director of Impaired Asset Team at Reading branch, Lynden Scourfield, had been sanctioning limits and additional lending facilities beyond the scope of his authority undetected for at least three years.
It is to be noted that a conservative higher provision of $0.5 million related to an old impaired asset in Saudi Arabia also contributed to the lower net profit figure for the first quarter.
The loan is ANZ's biggest single impaired asset. An ANZ spokesman maintained that the bank had reasonable grounds to expect a full recovery.
In a statement, the agency said, 'The ratings reflect the major Australian banks' dominant market position in their home markets, strong profitability, low impaired asset levels and solid and improving liquidity and capital positions.'
Typically, ICON acquires an impaired asset from its clients that a company is ready to liquidate; such assets range from real estate to excess inventory to capital equipment.
In addition to impaired asset data, Chart 9 presents capital ratios across the major banks as another measure of bank condition.
The FASB views this decision to use the impaired asset as being equivalent to a purchase decision.
An obvious example of an impaired asset might be a closed store location belonging to a retail operation where the organization continues to maintain the store property on the balance sheet at book value (original cost minus accumulated depreciation).
A conservative higher provision of $500,000 related to an old impaired asset in Saudi Arabia also contributed to the lower net profit figure for the first quarter this year.
"This impaired asset measure, which is specifically targeted at real estate assets, is therefore key to cleaning up Irish banks' balance sheets.
"Typically, ICON acquires an impaired asset from its clients that a company is ready to liquidate; these assets range from real estate to excess inventory to capital equipment.
Impaired asset expenses made a negative contribution to the pre-tax profit, after a 50.4 per cent or $64 million increase over the year.