Impairment Made Easy: When Financial Assets Go Bad

When a customer cannot pay or a loan will not be fully recovered, the financial asset must be reduced. This is called impairment. In this article, we explain how to apply the impairment rules in the IFRS for SMEs Standard. You will learn how to spot signs of impairment, how to calculate the loss, and how to record it. We use simple steps and everyday examples to help Business Accountants in Practice apply the standard with confidence.