Performing an impairment or an impairment reversal
Over time, the value of leased assets or properties can decrease or increase due to market developments. To correct the depreciation record, you can perform an impairment (in case the asset's value decreases) or an impairment reversal (in case the asset's value increase).
 | You can perform an impairment reversal only in these instances. |
• An impairment reversal does not exceed the original right-of-use.
• An impairment reversal was preceded by an impairment.
Procedure
1. At the Contracts selection level, select the contract for which you want to perform an impairment.
2. Go to .
3. Select the required lease contract line(s).
4. On the action panel, click Perform impairment.
The Impairment dialog box appears.
a. In the Select date of impairment section, specify a date in the Date of impairment field (effective date of the change).
b. Click Next.
c. Enter a value in one of these fields.
| | Once you add value in any of these fields, values in the other fields appear by default. |
- New impairment (by %)
- New impairment (by value)
- Impairment - new asset value (%)
- Impairment - new book value
d. In the Reason for impairment field, specify the reason for performing an impairment.
e. Click Complete.
| | You cannot undo an impairment. The Undo life cycle changes action is not available. |
Performing an impairment (reversal) results in adjusting the accounting commitments as of the date of implementation. The depreciation value will show an adjusted amount.
| | If you performed an impairment for an ASC 842 contract, the depreciation method changes from 'Annuity' to 'Straight-lined', starting at the moment the change is effective. |