All types of assets can be affected by impairment losses: tangible and intangible fixed assets, as well as non-current assets held for sale, financial investments, investment properties, inventories and even debts receivable. For example, when a customer becomes insolvent and has old invoices unpaid, an impairment loss is considered.
What causes Impairment Losses?
All of a company's assets are supposed to represent ig phone number data advantages, however, certain situations affect this ability. Here are some practical examples of impairment losses that companies may face:
Customers who stop purchasing products but still have outstanding invoices;
Customer insolvency, which may imply financial inability to honour commitments;
Sales below cost price, for example, sales or promotions;
Inventory loses its validity because it is perishable or is not sold in a timely manner because it is a seasonal product;
Machines that do not produce the units initially stipulated;
Outdated equipment.
Why are Impairment Losses important?
For financial health reasons, it is very important to be aware of impairment losses. These must be taken into account in accounting, with the respective periodic adjustments being made.
In this way, accounting effectively reflects the real value of the company, which allows access to reliable information by various economic agents, such as suppliers, customers and investors.
Are Impairment Losses deductible?
Yes, according to article 28.º-A of the IRC Code , impairment losses are deductible for tax purposes, those related to credits resulting from normal activity that, at the end of the tax period, may be considered doubtful and are shown as such in the accounting records, when accounted for in the same tax period or in previous tax periods.
However, not all impairment losses are deductible for IRC purposes, even if they have been included in the company's accounting records. In fact, all impairments must be recorded, even if they are not deductible.
