Loan impairment loss refers to the process that banks and other financial institutions confirm and measure the expected loss caused by the irrecoverable loan assets within the expected period after the loan is issued. It is an expense, usually reflected in the income statement, to reduce the bank's net profit. The accounting of loan impairment loss aims to accurately reflect the quality of bank loans and follow the principle of conservatism.

If the bank makes provision for impairment of loan assets, the provision for impairment can be reflected in the bank's financial statements within the expected period to remind investors of the quality of loan assets.