According to GASBS 42: A capital asset is considered impaired if the following apply:
1.) The decline in service utility of the capital asset is large in magnitude and
2.) The event or change in circumstances is outside the normal life cycle of the capital asset.
However, it is not necessary to repeatedly review all assets for impairment. GASBS 42 clarifies and states governments are required to evaluate prominent events or changes in circumstances affecting capital assets to determine whether impairment of a capital asset has been impaired. Usually it will be evident a capital asset should be assessed for impairment because government board meetings will discuss the asset(s) in question.
If management determines the asset is impaired; GASB 42 should be read in more detail as there are multiple accounting treatments depending on the circumstances affecting the asset.
Henry & Horne