Published by Silvia on www.cpdbox.com
Should you ever recognize impairment, or a provision on your intercompany loan (if you are a lender, of course)?
Why would you do that when all intercompany balances are eliminated on consolidation and there’s nothing left in the consolidated financial statements – no loan, no provision?
Short answer – YES, you should, in most cases.
Why? What’s the point?
Let me illustrate.