An Impaired Asset is a balance-sheet item which has value lower than the book value. This can be because of factors such as significant increase in competitive pressure, volatile markets, or technological obsolescence. In other words, an Impaired Asset is an asset whose value is decreased due to prevailing economic conditions or changes in the market. The impairment of assets can have a negative effect on the financial health of a business, so it’s important for companies to recognize and mitigate this risk. By proactively monitoring their assets and making adjustments when necessary, businesses can avoid major losses and achieve long-term success.