When should an impairment be charged against other comprehensive income for an asset under IAS 16?

An impairment must be charged against other comprehensive income for an asset under IAS 16 when the carrying amount of the asset exceeds its recoverable amount. This is significant as it reflects a decrease in the asset's value that has been identified through an assessment of its recoverable amount, which is the higher of its fair value less costs to sell and its value in use.

Recognizing an impairment loss means that the asset must be written down to its recoverable amount, and given that this impairment affects the asset's valuation significantly, it is essential for presenting an accurate picture of the entity’s financial status. Such reductions in asset value are important for ensuring that the financial statements provide a true and fair view of the entity’s assets and overall financial position. By charging the impairment to other comprehensive income, the loss does not affect profit or loss for the period, thus separating the operational performance from changes in asset valuations.

In other circumstances, such as when an asset is sold, depreciation is recorded, or when a revaluation surplus is recognized, these actions have different accounting treatments and implications that don’t directly relate to the impairment recognition process established by IAS 16.