Asset Impairment Journal Entry is a formal record of the decline in value of an asset that can no longer be regarded as providing future economic benefits to a business. This could be due to the physical decline of the asset, the obsolescence of the asset, or changes in the market conditions surrounding it. When a company records an Asset Impairment Journal Entry, it reduces the carrying amount of the asset and recognizes it as a loss on its income statement. Companies must assess the value of their assets on a regular basis to ensure accuracy and compliance with accounting standards.