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Impairment tests are required for all investments except those designated FVTPL . Provide 3 indicators of...

Impairment tests are required for all investments except those designated FVTPL . Provide 3 indicators of Credit Impairment on Bonds:

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Answer #1

Impairment means reduction in value of assets. This is decline, due to internal or external factors in future economic benefits

This require that assets carrying amount should not be more than its recoverable amount

There are some internal & External Sources which provide that the assets are required to Impair.

Indicator for impairment of assets are:

· Bond Value are significantly declined for than it expected

· Market rate of returns or Market interest rates significantly change which effect the discount rates which ae use in calculation of bond values

· The bond Carrying Amount in the entity is significantly differ from the estimate value of the Bond

· Evidence Available that shows that the economic performance of the bond are significantly going to affected

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