IMPAIRMENT OF VALUE Definition

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IMPAIRMENT OF VALUE is the permanent decline in the value of an asset. The entry is to debit the loss account and credit the asset for the loss in utility. See also FRS 11.

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STOCK SALE is where the equity price is assumed to include the operating assets and operating liabilities of the sellers business and not include the long term liabilities assumed. The long term liabilities assumed are shown as a separate line item and when added to the equity price results in the deal price. In those transactions indicated as an asset sale the equity price is assumed to include the operating assets.

FIXED CHARGE RATIO is calculated: total fixed costs/total expenses.

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