Final answer:
An impairment loss is recorded in the period where there is a permanent decline in an intangible asset's value.
Step-by-step explanation:
An impairment loss is recorded in the period where a permanent decline in an intangible asset's value is identified. An intangible asset is a non-physical asset that provides economic benefits to a company. Examples of intangible assets include patents, trademarks, copyrights, and goodwill.
When an intangible asset's value decreases permanently, it is considered impaired. The impairment loss is the amount by which the carrying value of the asset exceeds its fair value. The impairment loss is recorded on the income statement as an expense, reducing the net income of the company.