Real Estate

Impairment of Building (PPE)

Writing down a building's carrying value when its recoverable amount falls below book value.

Account NameTypeDebit ($)Credit ($)
Impairment Loss (Building)Expense (+)150,000.00-
Accumulated Impairment (Building)Contra-Asset (+)-150,000.00

💡 Accountant's Note

Under IAS 36, if a building's recoverable amount (higher of fair value less costs to sell, or value in use) falls below its carrying amount, an impairment loss must be recognized.

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