impairment charge

Definition

A specific reduction on a company's balance sheet that adjusts the value of a company's goodwill. Due to accounting rules, a company must monitor and test the value of its goodwill, to determine if it is overvalued. If it is, the company must issue an impairment charge on its balance sheet, to take into account the reduced value of the goodwill.

Use impairment charge in a sentence

There was an impairment charge and I was really happy with it and what it found and that made me quite happy.

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Due to a decrease in their goodwill, the accountants needed to enter an impairment charge on the balance sheet to reflect such.

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Although it's a relatively new term in the business world, impairment charge can have a huge impact on a company's perceived financial value.

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impairment imperfect competition