Damn this site is slow - Anyway how do you deal with impairtments on HTM and AFS assets?
IFRS allows for reversal, GAAP does not.
IFRS allows for reversal only for HTM debt securities. For everything else, GAAP and IFRS do not allow for reversals.
under IFRS debt securities need at least one loss event and the effects on the future cf can be reliably estimated. The balance sheet for the HTM is reduced to the PV of the CF (using the same interest when it is purchased). The loss (difference) is recognized in the I/S For AFS, the unregonized g/l in the OCI is recorded in I/S. You can reverse impairment for IFRS (except for AFS equity) USGAAP AFS, "the cost basis of the secuity is written down to its fair value , which becomes the new cost basis, and the amount of the write-down is treated as a realized loss. " USGAAP can’t reverse impairment. Subsequent increase in fv is unrealized and recorded in OCI.