Introduction to ProLinkAIM Fund Impairments
Important
To edit Impairment Schedule records, your user role must include the Fund - Impairment Modify - Modify security privilege. Otherwise, the records are read-only.
For accounting and CRA reporting purposes, the book value of an equity investment may be depreciated over time to reflect the outstanding value of the investment in a fund. Common methods of calculating this depreciation include Proportional Amortization, the Equity Method, and Straight Line Amortization. The result of this calculation is the book value of the investment. Other factors that might affect book value include impairment and equity adjustments.
Impairments occur when a company's assets lose value. If the actual fair market value of an asset decreases less than the book value of an asset, then the asset is impaired. The fair market value is the value of the asset in a transaction between unrelated parties. The book value of the asset is the amount the asset is worth on the company's financial statements. Impairments are the difference between the book value and fair market value.
The ProLinkAIM Edit Impairments screen originated to track impairment and has evolved to track impairment, depreciation, and other book value adjustments. You can use the ProLinkAIM Impairment functionality to track the book value of equity investments in funds over time. Depending on the impairment method selected for a fund, the book value will be determined using a system calculation or imported manually.
ProLinkAIM supports manual and straight-line fund impairments.
Prior to tracking impairments, you will need to ensure that certain information is set up through Fund Details and the Ownership Schedule.
Note
If you change the impairment method from one method to another, the system preserves existing impairment method records.
Tip
ProLink includes data views to help report on impairments across the portfolio:
Fund Impairments—Displays a row for each fund Impairment record, allowing you to view each impairment year per owner entity per fund. You can click a row to navigate to the applicable Edit Impairment screen for the fund. You can quick search on Fund ID, Fund Name, or Entity Name.
Impairment Schedule - All—Displays a row for each fund annual Impairments record and each deal annual Impairments record, allowing you to see book values across deal and fund investments. For example, you can report on all impairment entries for an owner/investor entity across both deal and fund investments. No click-through functionality is available. You can quick search on Fund or Deal ID, Name, or Entity Name.
Navigate to the fund, and the select Impairments in the left navigation menu.
Impairment Summary—Displays a single row summarizing impairment information from the fund and all Owner Impairment Schedules.
Column
Description
Original Capital
The fund-level total Commitment Amount from the equity schedule.
OPA Credits
The sum of total OPA credits from all tax credit grids on the Fund Benefit Schedule.
Current Credits
For LIHTC, sum the Expected Credits if not equal to zero; otherwise, the OPA Credits, from the Fund Benefits Schedule. For all other tax credit types, sum the LT Actual if available; if that equals zero, sum the Current Credits; if that equals zero, sum the OPA Credits.
Total Impairment
Sum the impairment charges from all impairment schedule rows, for all fund owners, across the annual impairment schedules on the fund.
Impairment Schedule—Displays the impairment information for the selected owner. You populate this grid using the Recalculate button.
Column
Description
Calculation Year
The year for the Impairment Schedule record (annual view).
MM/YYYY
The month and year of the Impairment Schedule Month record (monthly view).
Impairment Method
The Impairment Method used the last time the record was recalculated (Fund Details).
Projected CRA Period Ending Value
For manual impairment method, the projected CRA period ending value, updated through the Fund Book Value Mass Update Import utility.
Blank for Straight-Line impairment.
Beginning Book Balance
The book value for the investment at the start of the month, prior to applying any depreciation or adjustments.
For Impairment Schedule Month records, this value will be set to the prior month's Ending Book Balance.
For Impairment Schedule Year records, this value will be set to the prior year's Ending Book Balance.
Impairment Charge
The monthly or yearly Impairment charge.
Blank for the manual impairment method.
For Straight-Line:
Monthly—Displays the monthly Impairment Charge from the Impairment Schedule Month record, read-only.
Annual—Displays the annual Impairment Charge from the Impairment Schedule Year record, read-only.
Miscellaneous Adjustments
Adjustments to the book value that are applied after depreciation.
For Straight-Line:
Monthly—Displays the monthly Miscellaneous Adjustments from the Impairment Schedule Month record, read-only.
Annual—Displays the annual Miscellaneous Adjustments value from the Impairment Schedule year record, read-only.
Ending Book Value
The actual ending book value, updated through the Fund Book Value Mass Update Import utility for the Manual impairment method.
For Straight-Line:
Beginning Book Balance – Impairment Charge + Miscellaneous Adjustments
Annual/Month View—Select Annual to display all Impairment Schedule Year records for the selected entity. The Annual view uses Calculation Year as the first column of the grid. Select Month to display all Impairment Schedule Month records for the selected entity. The Monthly view uses MM/YYYY as the first column of the grid.
Entity List—Displays a list of all Owner or Owned Entities on an Ownership Schedule with the Impairment Schedule checkbox selected.
Note
The entity must be noted as a Bank Affiliate on the Entity record before you can select Impairment Schedule.
Recalculate—For deals using the Manual method, you will use the Recalculate button to populate the Impairments Schedule grid. See Calculate Manual Impairment for more information.
The button is disabled if:
The fund does not have an Impairment Method selected on Fund Details.
No entities are displayed in the Entity list.
You do not have the Fund - Impairment Recalculation - Modify or Fund - Impairment Backdating - Modify security privilege.
The "recalculation" privilege allows you to click the Recalculate button and recalculate impairment with an As of Date in the current month.
The "backdating" privilege allows you to click the Recalculate button and recalculate impairment with an As of Date in the current month or prior months from the current date.
Calc History tab—See Calculation History for information about the Calc History tab.
The system captures the history of impairment calculations for each investor-investment relationship on the Calc History tab of the Edit Impairment screen. Different from the standard record audit history, the calculation history shows the values that were used to perform impairment calculations. The calculation history is available for all impairment methods, and the columns in the grid depend on the impairment method(s) listed.
Caution
If you clear the Impairment Schedule checkbox on a finalized ownership schedule for an owner, the system deletes the impairment history along with current impairment data.
In cases where book values are calculated outside of ProLinkAIM, you will set up the Fund Details to use the Manual impairment method. You will also indicate each owner/owned entity that has an impairment schedule through the Ownership Schedule. You will then use the Fund Book Value Mass Update Import utility, which allows you to upload book values in ProLinkAIM for all funds in your portfolio using the Manual impairment method.
On the Edit Impairment screen, click Recalculate and then click Process in the popup to populate the schedule for each owner/owned entity. This ensures the fund/entity combination can be exported to the Fund Book Value Mass Update Import utility spreadsheet.
If it is the first time the Manual Impairment process is run, the system will create the impairment schedule with $0 for the Ending Book Value for each year; all other columns will be blank. The start date of the impairment schedule will be the selected Owner Entity's Admission Date. The end date will be the start date plus 16 years. You can add additional years through the Fund Book Value Mass Update Import utility. Subsequent runs of this process will set the Beginning Book Balance to the prior period's Ending Book Value for each period, either previous month value or previous year value depending on the periodicity of the impairment schedule.
For deals using the Straight-Line method, you can use the system impairment recalculation. You might perform this task on a quarterly basis (for projections) or annual basis (for actuals).
Click Recalculate above the Impairment Schedule grid to open the Recalculate Impairment popup.
The Entity Name displays the name of the investor entity selected on the Edit Impairment screen.
Enter the date from which to begin calculating values in the As Of Date field.
Values for years prior to the selected As Of Date will not be updated.
Important
If you have the Impairment Backdating privilege, you can enter an As of Date that is before the first day of the current calendar month or after the current date.
If you enter an As of Date prior to the first year of the Impairment Schedule, January 1 of the first year of the Impairment Schedule is used as the effective date.
If needed, enter an adjustment up or down to the Book Value in the Miscellaneous Adjustments field, which will will be applied to the month of the As Of Date.
Enter the date on which the impairment term will end in the Term End Date field.
The Term Length Months field is a read-only reference field containing the calculated number of months from the month of the As Of Date to the month of the Term End Date.
If needed, enter the Starting Book Value of the investment on the As Of Date.
If the calculation has never been run before, the value defaults to the Total Fund Commitment for the selected Investor Entity. If the calculation has been run previously, the value defaults to the Beginning Book Balance for the month of the As of Date. You can change the default.
Enter the expected final book value at the end of the term in the Salvage Value field.
Enter optional information about the recalculation in the Notes field, which is saved to the history.
Click Process in the top toolbar.
When you click Process, the system calculates the Impairment Schedule using the Straight-Line depreciation method. During processing, the system:
Validates whether the process will overwrite any existing Manual Impairment records. If so, the system prompts you to confirm or cancel the overwrite.
Creates the Impairment Schedule Year and Month records if they do not already exist.
The first year record will be the earliest of the following options: year of the selected entity's earliest admission date from the finalized ownership schedule or year of the As Of Date (Recalculate Impairment popup).
The last year record will be the year with the greatest value of the following options: As Of Date + length of Term or As Of Date + 16 years.
Calculates monthly Impairment records. Calculation will start in the month of the As Of Date and terminate at the month of the Term End Date, with the month of the As Of Date counting as Month 1 in the Term and the month of the Term End Date counting as the final month in the Term. The Ending Book Value in the last month of the term will be equal to the Salvage Value that was defined in the Recalculate Impairment popup.
First impairment month record:
Beginning Book Balance—User-entered Starting Book Value
Impairment Charge—(Starting Book Value - Salvage Value) / Length of Term
Miscellaneous Adjustments—Any user-input value for Miscellaneous Adjustments will be recorded on the Miscellaneous Adjustments field for this month
Ending Book Value—Beginning Book Balance – Impairment Charge + Miscellaneous Adjustments
Subsequent impairment month records:
Beginning Book Balance—Ending Book Value from the month immediately prior to the month being calculated
Impairment Charge—(Month Beginning Book Balance – Salvage Value) / Length of Term Remaining
Miscellaneous Adjustments—Will be blank. If there is an existing value for Miscellaneous Adjustments in a given month, that value should remain. The existing value should be factored into the calculation for Ending Book Value for that month.
Ending Book Value—Beginning Book Balance – Impairment Charge
Calculates annual Impairment records based on the results of the monthly impairment calculation.
Beginning Book Balance—The book value for the investment at the start of the year
Impairment Charge—The sum of Impairment Charge values from every Impairment Month Record in the year
Miscellaneous Adjustments—The sum of Miscellaneous Adjustments from every Impairment Month Record in the year
Ending Book Value—The Ending Book Value from the last month of the year
Automatic System Recalculation
When you import data for funds that use the Straight-Line impairment method, the system automatically recalculates the remainder of the depreciation term for the updated Impairment Schedule when the Ending Book Value in the import file is different than the Ending Book Value in the system for the same month. The recalculation begins in the month immediately after the latest month of an imported value.
The system uses the impairment Calc History to determine the variables for the recalculation:
As Of Date = First of the month immediately after the latest manually updated (imported) month
Term End Date = Date from the most recent history record for the impairment schedule
Salvage Value = Value from the most recent history record for the impairment schedule
Starting Book Value = The Ending Book Value specified in the import for the prior month
Miscellaneous Adjustments = $0.00
Automatic recalculation is skipped if the Impairment Schedule has never been calculated using the Straight-Line method before, if the date of the imported row is after the calculated Term End Date for the auto-recalculation, or if the imported value is less than the salvage value selected for the recalculation.
Automatic recalculation results in a new impairment calc history record with ProLink Admin shown as the user. The import log file also includes information about auto-recalculations.
If you visit the Impairment Schedule where automated recalculations are being processed, the screen displays a message indicating recalculations are pending or in process and the Recalculate button is disabled. In addition, the Impairment Schedule field on the Ownership Structure popup is disabled.
Before automatic system recalculation, the Impairment record shows the Impairment Schedule using the Straight-Line method.
Next, we import a Book Balance file with updated entries for September 2025 and October 2025.
If you visit the Edit Impairment screen, the system indicates an automatic system recalculation is being processed.
When the automated system recalculation is complete, the Impairment Schedule shows Manual for the Impairment Method for September 2025 and October 2025, with updated values. In addition, the system has updated the values for all future rows.
If you visit the Calc History tab, the grid shows the "Admin ProLink" user initiated an impairment calculation.