Bank of Montreal 2013 Annual Report Download - page 124
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For debt securities, a previous impairment loss is reversed through
net income if an event occurs after the impairment was recognized that
can be objectively attributed to an increase in fair value, to a maximum
of the original impairment charge. Reversals of impairment losses on
held-to-maturity securities are recorded to a maximum of the amortized
cost of the investment before the original impairment charge. For equity
securities, previous impairment losses are not reversed through net
income and any subsequent increases in fair value are recorded in other
comprehensive income.
As at October 31, 2013, we had 979 available-for-sale securities
(248 in 2012) with unrealized losses totalling $96 million (unrealized
losses of $86 million in 2012). Of these available-for-sale securities, 44
have been in an unrealized loss position continuously for more than one
year (28 in 2012), amounting to an unrealized loss position of $5 million
(unrealized loss position of $5 million in 2012). Unrealized losses on
these instruments, excluding corporate equities, resulted from changes
in interest rates and not from deterioration in the creditworthiness
of the issuers. We expect full recovery of principal and interest
payments from certain debt securities due to governmental support
and/or overcollateralization provided. The share prices and valuations of
many equity securities that we hold have also appreciated from earlier
levels. Based on these factors, we have determined that there is no
significant impairment.
We did not own any securities issued by a single non-government
entity where the book value, as at October 31, 2013 or 2012, was
greater than 10% of our shareholders’ equity.
Fair Value Measurement
For traded securities, quoted market value is considered to be fair value.
Quoted market value is based on bid prices. For securities where market
quotes are not available, we use estimation techniques to determine
fair value. Discussion of fair value measurement is included in Note 29.
BMO Financial Group 196th Annual Report 2013 135
Notes