Impaired Asset

An asset with a market value that is worth less than its book value.

If the sum of all estimated future cash flows is less than the carrying value of the asset, then the asset would be considered impaired and would have to be written down to its fair value.

Impairment

1. A reduction in a company's stated capital.

2. The total capital that is less than the par value of the company's capital stock.
Notes:

1. This is usually reduced because of poorly estimated losses or gains.
   
   2. Impairment can be used in many contexts. Whatever the situation, impairment is bad for the company.

Capital

1. Financial assets or the financial value of assets such as cash.
   
   2. The factories, machinery, and equipment owned by a business.

Capital Appreciation

A rise in the market price of an asset.
Capital appreciation is one of two major ways for investors to profit from an investment in a company. The other is through dividend income.

Appreciation

The increase in value of an asset.
Unless you are short selling, appreciation is always a good thing!

Asset

1. A resource having economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit.
   
   2. A balance sheet item representing what a firm owns.

 

Fixed Asset

A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be consumed or converted into cash any sooner than at least one year's time.

Tangible Asset

An asset that has a physical form such as machinery, buildings and land.

This is the opposite of an intangible asset such as a patent or trademark. Whether an asset is tangible or intangible isn't inherently good or bad. For example, a well-known brand name can be very valuable to a company. On the other hand, if you produce a product solely for a trademark, at some point you need to have "real" physical assets to produce it.