Describe the impact of asset impairment of property, plants, and equipment or goodwill to financial statements for entities across three different industries

A loss on impairment is recognized as a debit to Loss on Impairment (the difference between the new fair market value and current book value of the asset) and a credit to the asset. The loss will reduce income in the income statement and reduce total assets on the balance sheet. An impairment loss is the amount by which the carrying amount of an asset exceeds its recoverable amount. Property, plant, and equipment are tangible items that: The recoverable amount is the higher of an asset's fair value less costs to sell and its value in use.

 If a company wants to acquire another company, it purchases its fixed assets such as property, plant, and equipment, and intangible assets. For example, if Pepsi wanted to acquire Coca-Cola, Coca-Cola's value extends beyond the value of the manufacturing plants, equipment, and the bottling companies it might own. The Coke brand also has substantial value. As a result, the acquirer must account for these more elusive qualities. The amount the buyer pays beyond the book value of these identifiable assets is recorded as a separate asset called goodwill.

Since goodwill is an intangible asset, it is recorded on the balance sheet as noncurrent asset. A noncurrent asset is a long-term asset similar to fixed assets like property, plant, and equipment. There are guidelines stipulated by the Financial Accounting Standards Board for determining the value of goodwill for a company. An asset may become impaired as a result of materially adverse changes in legal factors that have changed the asset's value, significant changes in the asset's market price due to a change in consumer demand, or damage to its physical condition.

The property, Plant, and Equipment (PP&E) is a non-current, tangible capital asset shown on the balance sheet. These statements are key to both financial modeling and accounting. The balance sheet displays the company's total assets, and how these assets are financed, through either debt or equity. Impairment of Assets seeks to ensure that an entity's assets are not carried at more than their recoverable amount (i.e. the higher of fair value fewer costs of disposal and value in use).

Reference

 Whalen, J., Baginski, S., & Bradshaw, M. (2018). Financial reporting, financial statement analysis and valuation (9th ed.).retrieved fromhttps://www.gcumedia.com/digital-resources/cengage/2018/financial-reporting-financial-statement-analysis-and-valuation_9e.php

https://financetrain.com/impact-of-asset-impairment/

https://corporatefinanceinstitute.com/resources/knowledge/accounting/ppe-property-plant-equipment/