What are the journal entries to record the impairment of inv

What are the journal entries to record the impairment of inventory?

Solution

If asset is “impaired” beyond repair and is just junk, the journal entry will be:

Dr. Accumulated depreciation

Cr. Equipment/ asset

Dr. Loss on Impairment / Abandonment (whatever you want to call it)

If there is some scrap value to the equipment, the journal entry will be:

Dr. Scrap inventory ( not a fixed asset account, an other current asset account)

Dr. Accumulated depreciation

Cr. Equipment

Dr. Loss on impairment / abandonment