Financial instruments - ASPE 3856

Question 1

Financial instruments – Impairment (ASPE)

Answer 1

• Financial instruments tested for impairment at the end of each reporting period. Where impairment exists, reduce the carrying value to the highest of:
  o Present value (PV) of cash flows expected from holding the asset
  o Net realizable value (if asset sold)
  o Amount entity expects to realize from exercising its right to collateral
• Impairment can be reversed if asset subsequently recovers in value

Reference: ASPE 3856.16 - .19