Calculate Write-off Amounts

You can impair the cost of holdings based on changes in the fair market value of holdings and/or due to substantial changes in foreign exchange rates.

Your organization can test fixed assets for impairment periodically. If an impairment exists, you can use Eagle's Book Impairment Adjustment panel, or related events, to write off the amount due to an impairment loss. During processing, the system creates an adjustment transaction for the impairment and generates the appropriate ledger entries. The system adjusts the book value/current amortized cost of all relevant open lots held for the selected positions by the calculated impairment or credit loss and also non-credit loss for statutory purposes.

When you use the Book Impairment Adjustment panel to submit an impairment for processing, you can provide the adjustment amount. Alternatively, you can enter an impairment by providing an impairment price in local currency and/or by providing an impairment foreign exchange rate (Local to Base FX Rate), and have the system calculate the adjustment amount for you.

You can book an impairment based on:

• Amount. You can impair holdings cost based on an adjustment amount related to a change in the fair market value of the security.

• Price. You can impair holdings cost based on changes in the market price.

• FX Rate. You can impair holdings cost due to changes in foreign exchange rates.

• Price and FX Rate. You can impair holdings cost due to changes in both the market price and/or the foreign exchange rates.

Impairments apply to entities in some industries but not to others. For example, they can apply to insurance and other institutional clients that are not required to carry their investments at fair value. They do not apply to entities in certain specified industries such as brokers and dealers, investment companies, and defined benefit pension plans. Those entities account for substantially all investments in debt and equity securities at fair value. Because those entities are already holding their securities at market value, they have no need to make an impairment adjustment.

Impairments processing runs after Earnings processing, and is always the last event to process. Eagle Accounting stores amortized cost information at the position and lot level.