If a company has an asset with a book value of $5.0 million and estimates the future cash flows to be received over the asset's remaining life to be $5.5 million,no impairment has occurred and no loss would be recognized.

Impairment

The decrease in the market value of an asset below its book value, leading to a write-down of the asset's value on financial statements.

Future Cash Flows

Projected cash earnings and outflows that a company expects to receive or pay out in the future.

Book Value

Book value is the net value of a company's assets minus its liabilities, often used to assess whether a company's stock is over or undervalued by the market.