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Advances in the technological environment in which an asset is employed has an adverse impact on its future use.
Why is this an indicator of impairmentBecause what is now out there in terms of the new technology is better that what we currently have and so potentially rendering our equipment worth that bit less. Imagine a mobile phone producing company having a machine that produces their phones but then their competitor launches a more up to date, more technology driven machine that produces better technology phones than ours. We’d then need to assess if our machinery is impaired or not given the advances in the technological environment.
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