دانشگاه صنعت نفت

[Revised 04/06/10]—Accounting for financial instruments: impairments. The Board discussed various aspects of the approach for recognition and measurement of credit impairment for financial assets for which certain changes in fair value may be recognized in other comprehensive income.

The Board discussed the recognition and measurement of credit impairment for financial assets assessed for impairment on an individual basis. The Board decided that, for such financial assets, even if the asset is not impaired based on an entity’s assessment of the asset on an individual basis, recognition of a credit impairment may be appropriate based on loss experience for financial assets with similar characteristics. Therefore, the entity can recognize a credit impairment for such financial assets and measure the credit impairment based on a historical loss rate for financial assets having similar risk characteristics. If a financial asset is impaired based on an entity’s assessment of the asset on an individual basis, the entity should recognize a credit impairment for that asset equal to the amount by which the amortized cost exceeds the present value of the cash flows the entity expects to collect. In that situation, the entity should not recognize any additional credit impairment for the financial asset in addition to the amount determined based on the net present value of cash flows not expected to be collected.

The Board also discussed the recognition and measurement of credit impairment for pools of homogeneous financial assets for which impairment is assessed and measured based on a historical loss rate. For such financial assets, the Board decided that the amount of credit impairment to be recognized in net income at the end of the reporting period during which the assets were originated or acquired should be determined by applying an aggregate loss rate to the pool balance. In subsequent periods, changes in the loss rate would generally result in the recognition of an additional credit impairment or the reversal of a credit impairment recognized in a previous period.

Interest Income Recognition

The Board discussed the approach for recognition of interest income related to interest-earning financial assets based on previous decisions in the Accounting for Financial Instruments project. The Board agreed that the difference between the amount of the accrued interest receivable based on the contractual interest due and the amount of interest income accrued based on the application of the asset’s effective interest rate to the amortized cost balance net of the allowance should be recognized as an increase to the allowance for credit losses. [Revised] To the extent that the allowance account exceeds an entity’s estimate of expected losses, the difference would be recognized in income as a recovery.