If the carrying amount of an asset

If the carrying amount of an asset cannot be recovered through future use or sale, the asset should be written down to its fair value. The offsetting debit is to an impairment loss account.
CASE IN POINT
The 2009 annual report of JCPenney indicates that the company evaluates long-lived assets, such as store property and equipment and other corporate assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of those assets may not be recoverable. Factors that may trigger an impairment review include significant underperformance relative to historical or projected operating results, significant changes in the manner of use of the assets, and changes in the company’s over carrying value (i.e., book value) of the asset over its fair value.