Assessing Impairment of Investments

A CEO of a mid-sized manufacturing company has recently reported a decline in the market value of a significant investment in a smaller tech firm. The investment was initially recognized at a cost of $1.5 million. Due to technological changes and increased competition, the current fair value of this investment has dropped to $900,000. The tech firm continues to operate but is facing financial difficulties.

Under the accounting standards for impairment of investments, the CEO is considering whether to recognize an impairment loss for this investment. Which of the following scenarios would justify the recognition of an impairment loss for this investment?