When things go wrong
Impairment (write-down)
Also called: Write-down · Write-off
Reducing the value of an asset on the balance sheet because it is worth less than recorded.
When a company buys a business or builds an asset, it records it at a value on its balance sheet. If that asset later turns out to be worth less, for example because the acquired business performs worse than expected, the company must write it down.
An impairment is a non-cash charge: no money leaves the company that day, but it reduces profit, sometimes into a large net loss.
General explanation for education only, not investment advice. Company-specific definitions can differ; each breakdown uses the company’s own.