3.

Impairment of Financial Assets (HTM & AFS are evaluated for impairment every period):
IFRS:
I. Impairment is indicated if at least one loss event has occurred and its effect on the future cash
flows can be estimated reliably. Losses due to future events are not recognized;
ii. For debt, loss events are: default, bankruptcy or reorganization, concession from bondholders or
financial difficulty of the issuer. Downgrade or lack of a liquid market are not considered being
impaired;
iii. Equity loss events: fair value has experienced substantial or extended decline below its carrying
value, or changes in the business environment;
iv. HTM impairment write down to pv of estimated future cash flows using historical rate (may not
equal to fair value)
v. Equity securities cannot be reversed

GAAP: If changes are not temporary, impair to fair value.

4. Impairment of Investments in Associates:

Equity Method: Once impaired, write down to fair value;

5. Goodwill Impairment: Occurs when Carrying Value > Fair value

IFRS: if carrying value of the unit> recoverable amount, impair
GAAP:
I. Test: if carrying value of the unit > fair value, impair
ii. Measure: loss = carrying value of goodwill implied fair value of good will