Pearse Doherty (Donegal South West, Sinn Fein)
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Question 215: To ask the Minister for Finance further to the publication by the National Assets Management Agency of its 2011 management accounts and its report for the fourth quarter of 2012, if he will provide an analysis of the €810,000,000 impairment charge booked in the accounts on a provisional basis, pending audit by the Comptroller and Auditor General; if he will confirm that this impairment charge is based on an assumption regarding the ultimate disposal price obtained for underlying assets; and if he will confirm the way such disposal prices are estimated by NAMA. [27945/12]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by NAMA that the net impairment charge is based on a detailed assessment of expected future cash flows for NAMA managed debtors, as described on page 29 of the Q4 2011 accounts. As required by International Financial Reporting Standards (IAS 39), this assessment was based on all future cash flows (including rental receipts and expenses) expected to arise from the individual debtor portfolios and not solely based on disposal values. A full reconciliation to the final audited position will be provided in the 2011 Financial Statements when they are published following the completion of their audit by the C&AG. The ongoing recoverability of income recognised in accordance with the effective interest rate methodology, is reviewed as part of NAMA's detailed annual impairment review. To the extent that following the acquisition of the loans, there is a change in the timing or amount of NAMA's expected cash flows, whether it is favourable or unfavourable, IFRS requires that NAMA adjust the carrying value of the loan and recognise an impairment charge or gain in its accounts. NAMA is currently carrying out its detailed annual impairment review for the 2011 year-end.

NAMA intends to introduce a semi-annual calendar accounting impairment review of its loan portfolio commencing 30 June 2012.