New on the Horizon : Impairment of financial assets managed in an open portfolio

New on the Horizon: Impairment of financial assets in an open portfolio considers the proposals of, and details our observations on, the Supplement to ED/2009/12 Financial Instruments : Amortized Cost and Impairment, which was published on 31 January 2011. The IASB’s and FASB’s efforts to develop a single common impairment model will result in significant changes – in particular for banks applying the proposals to their open portfolios, given the change from recognizing incurred credit losses to estimating future losses separately for the ‘good book’ and the ‘bad book’ within a portfolio.