Fixed Asset Impairment is a business concept that deals with the decreased value of fixed assets. It happens when an asset’s ability to generate economic benefits decreases due to obsolescence, damage, deficiencies or other factors. To reflect this on a company’s balance sheet, its asset value needs to be written down accordingly. In other words, a firm’s fixed assets can become impaired and require a downward adjustment in their carrying amounts for accounting purposes. It is important to remember that impairment does not necessarily mean that the asset cannot be used – it just means it has lost its earning potential.