In finance, the term “impairment” denotes a decline in the value of a given asset. Impairment occurs when an asset ceases to deliver enough value to justify its price.


Due to media hype surrounding its launch, a specific stock is valued at 100 Swiss francs to the share at the time of its initial public offering (IPO). After the IPO, a lack of market demand forces the impairment of the stock, and the value of each share is reduced by 20 francs to just 80 francs.

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