GAAP Debt Security Accounting: Impairment
Other-than-temporary-impairment occurs when an impairment charge is taken on a security whose fair value has fallen below the carrying value on the balance sheet and its value is not expected to recover through the holding period of the security. Management is required to assess OTTI at each balance sheet date. If OTTI exists, a multi-step process begins, wherein the amount of impairment loss recognized depends on the entity’s intent to sell or ability to hold the security.
This OnDemand Learning session will provide an overview of the accounting for debt securities with other-than-temporary impairments, including example journal entries and financial statement disclosures.
