On the other side, impairment is the other aspect of changing the value of an
asset, there may be instances in which a fixed asset loses its value and needs to be
written down in the accounting books of the firm. In such an instance, the value will be
written down to its true market price or will be sold. An asset that loses its value and
needs to be written down is referred to as an impaired asset. Once an asset has been
impaired, there is very little possibility for the asset to be written up; therefore, the asset
must be carefully evaluated before it is categorized as an impaired asset.