Value-Oriented Procurement: The Impairment Test in Procurement Processes
SummaryImpairment testing is a familiar discipline in financial accounting: assets are periodically re-examined to check that their carrying value still reflects what they can actually deliver. This note carries that logic into the procurement function—asking what it would mean to judge sourcing decisions not by their upfront price, but by their ability to hold value over the life of the relationship.
It sketches how an impairment lens reframes supplier selection, contract renewal, and category review: where a nominally cheap decision quietly erodes value, and where the discipline of a periodic write-down forces a more honest conversation about what a supplier, a tool, or a contract is really worth today.