To: All Licensed Banks and FLCs

Operating in the Sultanate of Oman

After Compliments,

Sub: Impairment of equity investments classified as Available for Sale

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1. Attention of Licensed Banks and FLCs is invited to paragraph 61 of International Accounting Standard (IAS) 39 on Financial Instruments: Recognition and Measurement which states that "A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost is also objective evidence of impairment." Attention is also invited to our letter BSD/2009/BKUP/Banks & FLCs/032 dated January 12, 2009 wherein Licensed Banks and FLCs have been advised to consider a threshold of 35 percent decline in market value for assessing impairment of equity investments held under Available for Sale (AFS).