impairment charge

Definition

An accounting entry recognizing that an asset is now worth less than its book value, forcing companies to admit their expensive acquisition was actually terrible. It's the corporate version of finding out your vintage comic book collection is worthless.

Example Usage

The company took a $500 million impairment charge on the acquisition made two years ago, effectively admitting the CEO's 'strategic vision' was expensive nonsense.

Origin

Accounting standards terminology that became prominent with fair value accounting rules in 1990s-2000s

Fun Fact

Impairment charges are non-cash expenses, meaning they don't affect current cash flow—they just destroy shareholder value on paper, which is somehow supposed to be comforting.

Source: FASB and IASB accounting standards

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