This study develops a rationale for the existence of asymmetric financial reporting rules mandating disclosures of unfavorable economic events. This characteristic is shared by a broad set of accounting rules, generally referred to as impairment accounting; impairments are an archetype for many existing measurement rules as illustrated by impairment tests, lower of cost or market or contingent liabilities. Moreover, beyond pure impairment accounting, the asymmetric reporting of bad news is a key institutional fact that permeates the very foundations of financial reporting, from the going-concern opinion issued by an external auditor to the stricter enforcement by courts of law over material omissions of adverse events.