Which of the following actions results from a recognized impairment loss?

When an impairment loss is recognized, it indicates that the carrying amount of an asset has exceeded its recoverable amount. The correct response outlines that the carrying amount is adjusted downward to reflect this recoverable amount, which is the higher of the asset’s fair value less costs to sell or its value in use.

Recognizing an impairment loss serves to ensure that the financial statements do not present an overvalued asset, aligning the reported values with the actual economic benefits expected from the asset. This adjustment is essential for providing a true and fair view of the company's financial position, maintaining compliance with accounting standards that require assets to be recorded at amounts that do not exceed their recoverable values.

The other options do not accurately reflect the accounting treatment for impairment losses. Adjusting the carrying amount to the recoverable amount ensures that assets are not overstated on the balance sheet and that the financial statements provide reliable information to stakeholders.