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Phase II: Impairment

 Phase II – Amortised cost and impairment of financial assets

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Project milestones


About the project

This is the second phase of the project to replace IAS 39 Financial Instruments: Recognition and Measurement.

The objective of this phase is to improve the decision-usefulness of financial statements for users by improving the amortised cost measurement, in particular the transparency of provisions for losses on loans and for the credit quality of financial assets.

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Project news

18 January 2012 The staff continues to develop the general impairment model based on credit deterioration.

5 August 2011 On 5 August 2011, a Financial Instruments Working Group (FIWG) meeting was held in London to discuss the impairment project. For more information please click here.

May 2011 On Tuesday 24 May 2011 there were two webcasts by the IASB staff at 10am and 4pm (London time) to provide updates on the statuses of both the impairment and the hedge accounting projects. Click here to listen.

Click here to see all previous project news on this project.


Last IASB meeting update

19 November 2012

At this meeting the IASB discussed suggested clarifications to the criteria for recognition of lifetime expected losses in the three-bucket model. The IASB tentatively decided to simplify the requirements to now contain only one criterion, namely that an entity should recognise a lifetime expected loss in the three-bucket model if there has been significant deterioration in credit quality since initial recognition (taking into consideration the term of the asset and the original credit quality). An example of significant deterioration would be if an existing financial asset would be priced differently because of the increase in credit risk since initial recognition.

Click here to listen to the IASB meeting audio playback.

Read the full meeting update and all previous updates and observer notes for this project.

Next discussion by the IASB

At its November 2012 meeting, the IASB will discuss possible clarifications to the criteria for recognition of lifetime expected losses. A public IASB Education Session on the FASB’s alternative model is also planned for November 2012, and will be provided by the FASB..


Page last updated: 27 November 2012


Related information

Listen to a May 2011 webcast on impairment. [updated 15 Aug 2012]

Listen to 30 July and 31 July 2012 webcast on  Financial Instruments Projects

Click here for a summary of the Expert Advisory Panel discussions

Click here for key issues to begin re-deliberations

Click here for the outreach summary, May 2011

Project contacts

Jana Streckenbach
Senior Technical Manager

Sue Lloyd

Senior Director, Technical Activities

Sara Glen

Practice Fellow

Manuel Kapsis
Technical Manager

Katherine Cancro
Assistant Technical Manager