The expected or estimated sale price of an asset. It represents the residual value of an asset (particularly, a long-lived asset such as property and equipment, etc.) in the situation where there are indications that the carrying amount of the asset may not be recoverable under, or due to, specific situations. In other words, impairment is assessed by comparing the carrying amount of an asset with its expected future net undiscounted cash streams from use in addition to its net recoverable value.

If an asset is found to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds its net recoverable value. As a result, the asset will be written-down by an amount corresponding to that impairment during the reporting year. The amount of write-down represents losses specific to the asset in question.

Net recoverable amount for a financial asset (e.g., a loan) the most probable amount that will be realized from the sale of any collateral securing it under normal market conditions.