What is meant by 'impairment loss'?

Impairment loss refers to the situation where the carrying amount of an asset exceeds its recoverable amount, leading to a reduction in the asset's value. When an asset is deemed impaired, it indicates that its fair value has declined to a point where it can no longer provide economic benefits equal to or greater than the amount at which it is carried on the balance sheet. This necessitates the recognition of an impairment loss in the financial statements, which reflects the decrease in value.

In contrast, the other options define different forms of loss. Selling an asset at a lower price pertains to realized losses, which relate to transactions rather than a reduction in value due to impairment. A temporary reduction in an asset's book value does not capture the essence of impairment, as impairment is not merely a temporary fluctuation; it signifies a permanent decrease in value that necessitates adjustment. Lastly, a loss from operations due to natural disasters refers to external events impacting business operations, rather than the intrinsic value assessment of an asset itself. Thus, the correct understanding of impairment loss lies in its definition as a decrease in the value of an asset below its carrying amount.