Process an Asset Impairment

You process an asset item impairment using the Transaction Center and the Equipment Info Center.

Complete all of the steps below in the accounting period in which the impairment occurs.

To record an asset item impairment, complete the following steps:

In Transaction Center > Transaction Entry, enter and post a journal entry that debits an Impairment Expense account and credits an Accumulated Asset Impairment Loss account. This reduces the asset's value on your balance sheet and recognizes a loss on your income statement.

In Info Center > Equipment, open the asset item that is impaired, and complete one or both of the following:

Option

Description

GL Cost Tab

On the GL Cost tab, enter a row in the Acquisition Cost grid for the impairment and save the changes:

In the Amount field, enter the negative amount of the impairment (loss in value). This reduces the depreciation basis for the asset item.
In the Period field, enter the accounting period in which you are processing the impairment. The impairment will be included in the depreciation basis for calculating depreciation starting in this period and going forward.
In the Account field, enter the asset account for the impaired asset item.
IMPORTANT: You must clear the Life of Asset check box.
With this check box cleared, the impairment reduction is applied to the depreciation basis when calculating depreciation going forward (starting with the period that you entered in the Period field). The impairment amount will not be used to recalculate depreciation for prior periods.

An acquisition cost with the Life of Asset check box selected must already be entered for an asset item in the Acquisition Cost grid before you can add a row in the Acquisition Cost grid for an impairment with the Life of Asset check box cleared.

GL Book Tab

On the GL Book tab, change the amount in the Useful Life in Years field and save the change. Do the same on the Additional Books tab if you have additional books.

In Asset Management > Depreciation Processing, run depreciation for the impaired asset item. Depreciation is calculated for the current period with the impairment factored in for the depreciation calculation. Vision will use the straight-line depreciation method for the remainder of the asset item's useful life in years, regardless of what depreciation method the is assigned to the asset item on the GL Book tab and the Additional Books tab in the Equipment Info Center.