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Accounting & Reporting

Impairment

Also called: writedown, impairment charge, goodwill impairment

An impairment writes an asset down when its carrying value exceeds what it can recover. Goodwill impairments are the largest and most telling: they're an admission that an acquisition was overpaid for. They're non-cash and companies rush to label them one-off, but a pattern of impairments is a pattern of capital allocation failures, and the cash left the building years earlier.

Want more than a definition? Learn it in Capital Quarters →

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