Reducing The Uncertainty About Impairment Provisions

For RPs left confused by the SORP 2008 requirements for impairment provisions, help is now available.

There has been a huge amount of discussion and concern about potential impairment provisions that need to be made to the carrying value of housing properties in the 2009 financial statements. There are fears over the consequent effects this may have on covenant compliance, which have been made worse by a lack of clarity over precisely how the impairment judgement should be assessed.

Although there is commentary in the 2008 Statement of Recommended Practice (SORP), which is unchanged from previous years, its precise meaning has been very much open to interpretation and for most registered providers (RPs) has previously not had to be applied in any significant way.