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...... Financial impairment is understood in two ways: first of all, it represents a reduction in the companys stated capital as a result of poor estimation of incomes and losses. Secondly, it can represent the entire capital, which is lower than the companys par value capital stock. In both cases, impairment generates negative effects upon the economic agent and it is undesirable (Investopedia, 2009). The attention on cases of impairment has generally been reduced, but this is expected to increase with the more emphasis placed on financial analysis and audits, a need generated by the contemporaneous economic crisis (Wayman, 2009). As an addition then, there have been developed complementary regulations. IFRS 3 for instance, states that while amortisation tests will not be conducted, impairments tests will still be performed. IAS 39 states that the interest income related to impaired credits would be recognized starting with 2005; more net present value calculation on impaired loans will be conducted (Nordea, 2005)
Impairment can be observed when the issuer encounters severe financial difficulties; he breaks the contractual terms with his partners; he becomes involved in dubious borrowing; it becomes likely that the company will declare bankruptcy or will be purchased by another entity;

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