Impaired Asset


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Impaired Asset

An asset with a market value less than its value listed on the company's records, especially when the value is unlikely to recover. The cash flow an impaired asset will generate is less than the difference between its market value and its book value. A company must write down the value of impaired assets once per year. Common impaired assets include accounts receivable, long-term assets, and, especially, good will.
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In a statement, the agency said, 'The ratings reflect the major Australian banks' dominant market position in their home markets, strong profitability, low impaired asset levels and solid and improving liquidity and capital positions.
This impaired asset measure, which is specifically targeted at real estate assets, is therefore key to cleaning up Irish banks' balance sheets.
As of the end of June 2009, the group has significantly written down most of its impaired assets, including the ABCP and residential mortgage-backed securities (RMBS), which Mega Bank bought from the trustee of several collateralized bond obligation (CBO), given its role as a credit-impaired asset put provider.
In addition to impaired asset data, Chart 9 presents capital ratios across the major banks as another measure of bank condition.
121 requires finding the expected net cash flows for an asset or a group of assets at the time impairment is identified, only the timing of cash flows and the appropriate discount rate remain to be identified at the time a potentially impaired asset, with no market value, is subsequently examined.
An obvious example of an impaired asset might be a closed store location belonging to a retail operation where the organization continues to maintain the store property on the balance sheet at book value (original cost minus accumulated depreciation).
In a nutshell, FAS 121 is now the guideline for all companies to use when taking a write-off on an impaired asset.
Indeed, all financial institutions responded in a similar manner to this economic environment of deleveraging and impaired asset quality regardless of whether they were subject to risk-based capital standards.
The support consists of an impaired asset measure worth 269 million and a 2.
The FASB defended itself by concluding that a company's decision to continue operating rather than sell an impaired asset essentially is a capital investment decision-- management believes operating the asset is more beneficial than selling it.
On this basis, the Commission was able to conclude that the impaired asset measure and MKB's restructuring plan were suitable for restoring the bank's long-term viability without continued state support, ensured that the bank's owners contribute to the cost of restructuring and limited the distortions of competition brought about by the aid, in line with EU state aid rules.