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You mentioned in your lecture on impairments that when for some reason a machine will produce less products than it was previously expected it is the sign of impairment . Why ? What is the correlation between smaller volume of manufactured products with the impairment of the machine ?
If it is not at full operating capacity then the amount we have paid may not be reflective of the current value, hence we perform the impairment review to check if the asset is impaired or not.
thanks for reply