פירוש על עבודה זרה 105:3

In order to annul an idol, the idolater must treat the idol with enough disrespect that we can be confident that the idol is no longer considered to be holy by the non-Jew. Note, that the issue is not a physical issue. The mishnah is not asking the question, does this still look like an idol. Rather the issue is psychological. At what point can an outside observer assume that the owner of the idol no longer is relating to it as a god, but rather as merely a physical item devoid of religious meaning.
The first way for the owner to annul the idol is to somehow physically damage it. If he cuts off one of its appendages, this is sufficient physical damage for it to be annulled. Furthermore, if he defaces, meaning he distorts the facial features of the idol, it is annulled, even if he has not diminished the material used to make the idol.

Acting in a disgraceful way in front of the idol does not annul it.

If a non-Jew sells or uses the idol as a pledge, according to Rabbi [Judah the Prince] he has annulled the idol. Since he treated it in a profane matter, and did something that one would not do to a divine idol, he must no longer be considering it to be an idol. The other Sages disagree with Rabbi.