OTTI

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By Edith Orenstein, FEI Financial Reporting Blog -OMG, have you heard about OTTI? It’s not on this list of IM abbreviations so we’ll try to explain. OTTI, or Other Than Temporary Impairment, is a term found in FASB and SEC literature to denote when a loss in market value of an investment in debt or equity securities must be written off. Key considerations include current market conditions as well as conditions of the issuer of the security, and the intent and ability of the investor to hold the securities until recovery. We review some of the existing liturature and current developments on this topic in light of the current credit crisis. Read more here.

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