These situations must be evaluated to see if there is real impairment. So, for instance, if an active market for an investment disappears because a once-public company has gone private, but the company is still in good financial position, there is no impairment. Simi- larly, a downgrade in credit rating does not mean impairment unless it is accompanied by one of the above conditions. When an impairment loss must be recorded, it is measured as the difference between the investment’s carrying value and fair value. The carrying value of the investment is reduced to fair value either directly or indirectly through an allowance. Impairment losses are not reversed.
