Impairment of available-for-sale equity instruments

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22 May 2009

In releasing the May 2009 issue of the IFRIC Update newsletter, the International Financial Reporting Interpretations Committee has taken the unusual step of drawing attention to its tentative agenda decision relating to impairment of available-for-sale equity instruments because of its particular significance in the current market environment.

The IFRIC was asked to clarify the meaning and interpretation of the phrase 'significant or prolonged' as used in IAS 39.61 – which requires an entity to recognise impairment if the decline in value is 'significant or prolonged'. Although IFRIC has tentatively decided not to add the issue to its agenda because the IASB is working on an accelerated project to replace IAS 39, the IFRIC was concerned that some applications of the impairment requirements in practice are inconsistent with the standard. Accordingly, IFRIC's draft agenda decision identifies some of the inconsistencies and IFRIC's conclusions about them. IFRIC has invited comments on its draft agenda decision, which it expects to finalise at IFRIC's 9-10 July 2009 meeting. The IFRIC Update may be Downloaded from IASB's Website.


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