Impairment toolkit: Financial instruments

In our Toolkit podcast series, we take a deep dive into one accounting topic each month that goes beyond the basics and into areas that require judgment. This month, we are covering impairments – a complex topic with a variety of accounting and reporting considerations.In this episode, Heather Horn was joined by Bret Dooley, a partner in the National Office, and Shannon Detling, a partner in the Financial Markets practice, to discuss key considerations when working through the impairment accounting framework for financial instruments. In this episode, you will hear them discuss:0:38 - An overview of the impairment model for equity and available-for-sale debt securities6:07 - How current market conditions are impacting impairment assessments11:15 - Highlights of the current expected credit losses (CECL) model for amortized cost assets17:12 - Effect of macroeconomic trends when determining credit losses under CECL29:03 - Consideration of risks and relevant controls in the credit loss estimation process33:16 - Credit outlook for the future based on current trends38:12 - Key reminders for companies thinking through the impairment model for financial instrumentsWant to learn more? Refer to the first episode in our impairment toolkit series on inventory and other current assets, along with previous podcasts on impairment accounting, including accounting for goodwill and other impairments and answers to your impairment valuation questions. Stay tuned for more insightful episodes in the coming weeks.Bret Dooley is a Deputy Chief Accountant in PwC’s National Office and the financial instruments accounting leader. He has over 25 years of experience specializing in the financial services, banking, and capital markets industries. Bret focuses on emerging financial reporting issues relating to financial instruments, developing interpretive guidance, and assisting clients in resolving complex accounting matters.Shannon Detling is a Partner within PwC’s Financial Markets group, specializing in financial instruments, financial risk management, and financing transactions. He has extensive knowledge of capital markets, changing regulation and policy, and evolving market conditions. Shannon advises clients on how to achieve their objectives and assists them in execution from strategy through to operations, valuation, and reporting, including design, implementation, and integration of systems, processes, and controls.Heather Horn is PwC’s National Office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series. With over 30 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected]. Did you enjoy this episode? Text us your thoughts and be sure to include the episode name.