Final answer:
A write-down of equipment due to impairment results in a lower book value on the balance sheet and an impairment loss on the income statement, reducing net income but not directly affecting cash flow.
Step-by-step explanation:
The write-down of equipment due to impairment will cause a reduction in the carrying amount of the equipment on the balance sheet and an impairment loss on the income statement. When equipment is deemed to be impaired, it means that the expected future cash flows from the use of the equipment are less than its current carrying amount.
As a result, the company must reduce the book value of the equipment to its recoverable amount, which leads to an immediate expense being recognized which is known as an impairment loss. This non-cash expense will reduce net income and may have tax implications, but it does not affect the company's cash flows directly.