Process Impairments by Amount

In the Book Impairment Adjustment panel, you can process an impairment for a single entity to write up or write down investments based on an amount. You can impair a holding based on specific lot or by position. You must enter a separate impairment transaction for each accounting basis where you want to impair the lot or position.

To process an impairment by amount:

1. In Accounting Center, in the left navigation pane, click Transactions> Adjustments> Cost Adjustments > Book Impairment Adjustment.
   You see the Book Impairment Adjustment panel.
2. In the Impairment Type section, click the Impairment Processing Flag field and select a value of Position or Lot.
3. In the Entity Information section, select a single entity and accounting basis.
4. In the Security Information section, click the Impair by Option field and select a value of Amount.
5. Click the Event Type field and select a value of Impairment.
6. Complete the remaining options on the Book Impairment Adjustment panel.
   You must identify the direction of the write-off, indicate if the position/lot is long/short, and identify the security and open lot, as appropriate. You can specify the impairment reason, the adjustment amount in the Local Cost Adjustment, Credit Loss Local Adjustment, and Non-Credit Loss Local Adjustment fields, and can specify the cost offset account.
7. Click Submit.
   The system calculates the impairment amount or credit and non-credit loss, as applicable, for the selected lot or for each open lot held within the selected position, and posts the related accounting entries. The system adjusts the book value/current amortized cost of all relevant open lots held for the selected positions by the calculated impairment that will be required to reduce amortized cost.