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IAS 39 Financial Instruments: Impairment of an Equity Instrument

Go To List of IFRIC Issues One of the impairment triggers in paragraph 61 of IAS 39 is 'a significant or prolonged decline in the fair value of an investment in an equity instrument below its cost'. This project is considering guidance regarding whether 'significant' in paragraph 61 should be measured against the original cost or the original cost less any prior impairment losses, and whether 'prolonged' in paragraph 61 should be evaluated against the entire period for which the investment has been held, or against the time period since the last recognised impairment loss. In addition, guidance is being sought as to whether IAS 39 allows an entity to, in some way, segregate different loss events impacting an investment in a single equity instrument and evaluate the significance and duration of each event separately. Discussion at June 2005 IFRIC Meeting Project removed from the IFRIC agenda.