USA Recording a Partial Impairment to a Fixed Asset

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What is the typical approach for recording a Partial Impairment for a Fixed Asset. For instance, if the Carrying Value/NBV of a Fixed Asset is $750, but the Recoverable Amount is now $700, would you typically record an impairment charge of $50 as:

1.

DR Impairment Expense $50
CR Accumulated Depreciated $50


Or


DR Impairment Expense $50
CR Cost of Asset $50


I presume you would want to leave the Cost of the Asset Unchanged, and so I think approach #2 would not be desirable, but if you can please share your thoughts, of if there is a better approach for recording a Fixed Asset Impairment other than the 2 aforementioned approaches.

Thanks.


Thanks,
 
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The impairment charge would be recorded as a loss on the income statement and the depreciation would also be reduced by the amount of the impairment charge.

Dr: Loss on Impairment of Fixed Assets $50
Cr: Accumulated Depreciation $50
Cr: Fixed Assets $50

Journal entry reduce the carrying value of the fixed asset to $700 and would record a loss of $50.

Kind regards,
Hamza
 

kirby

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For US GAAP,
your method 1 is correct.
 

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