Every right and advance on the balance sheet is a bet that future income will justify the number. is what happens when the bet sours.
A catalogue carried at £600,000. An advance carried at £150,000. Both sit on the balance sheet as assets, and both are really forecasts: each says we expect future income to be worth at least this much.
handles the expected fade, the planned decline you knew about when you booked the asset. But income doesn't always behave. A release underperforms, a dries up, a algorithm changes, an artist's profile collapses. When the future income falls below the number you're still carrying, amortisation alone no longer tells the truth.
Impairment is the correction. It's a write-down (beyond routine amortisation) that brings a carried asset back to what it can genuinely still earn. This episode is about the two questions that drive it: when must you test, and how does the test work?