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- Title
Other-Than-Temporary Impairment: Identifying the Amount of Credit Loss.
- Authors
Rees, Thomas; Ruta, Dustin
- Abstract
The article discusses the accounting rules for assessing other-than-temporary impairment (OTTI) and how to identify the amount of credit loss. It provides a summary of the impairment guidance for assessing OTTI for investments in debt securities with emphasis on conducting the quantitative discounted cash flow test. It also explains the process for separating the amount of impairment due to credit loss and for determining the fair value of a security. An example of an impairment analysis is given showing how to calculate the present value of cash flows.
- Subjects
BUSINESS losses; NET losses; CASH flow; FAIR value; DISCOUNTED cash flow; BONDS (Finance); INVESTMENTS
- Publication
Bank Accounting & Finance (08943958), 2010, Vol 23, Issue 2, p31
- ISSN
0894-3958
- Publication type
Article