when a company has an asset that is now worth less than the value given for it on the company s balance sheet that asset is impaired using an inflationary accounting method the company will write down the asset s value on the company s balance sheet the loss in value is also recorded on its income statement 
gaap and ifrs have differing standards for impairment depreciation is not the same thing as impairment and when an asset is impaired depreciation on that asset also needs to be adjusted 