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Effect of impairement on Taxes
Schweser Book 3, Page 185:
Impairment reduces the carrying value of an asset on the balance sheet and is recognized as a loss in the income statement.
a few line down, it is mentioned:
There are no tax savings from an impairment on an asset value, until the asset is sold or disposed off.
Question:
If the impairment is recognized as a loss on the income statement, why would there be no tax savings? Wouldn't the pretax earnings be less if it is recognized as loss? |
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发表于 2011-7-13 16:18
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