NOTE 11. IMPAIRMENT CHARGES ON LOANS AND RECEIVABLES
| Group | 2012 €'000 |
2011 €'000 |
|---|---|---|
| Balance at the beginning of the year | 2,751,266 | 1,484,523 |
| Increase in specific provision | 1,016,647 | 1,704,889 |
| Release of specific provision | (419,189) | (270,352) |
| Release of collective provision | (85,302) | (167,794) |
| Total movement in provision | 512,156 | 1,266,743 |
| Balance at the end of the year (Note 19) | 3,263,422 | 2,751,266 |
| Recognised in income statement | 517,841 | 1,266,743 |
| Recognised against loans and receivables | (5,685) | - |
| 512,156 | 1,266,743 | |
| Analysed as: | ||
| Specific impairment | 2,750,572 | 2,153,114 |
| Collective impairment | 512,850 | 2,751,266 |
| 3,263,422 | 2,751,266 |
The release of the specific impairment provision (€0.4 billion in 2012) primarily relates to a reduction in the acquisition value of certain loans following the completion of due diligence during the year.
The impairment provision for each specifically assessed debtor connection is calculated as the difference between the carrying value of each debtor connection's total loans and the present value of expected future cash flows for the connection. Where there was a reduction in the acquisition value of loans following the completion of due diligence, this resulted in a reduction in the impairment provision that was previously recognised for certain debtor connections.
The release of the collective provision is mainly due to a reduction in the loans and receivables that were collectively assessed for impairment in 2012 compared to 2011. During 2012 the management of a number of debtor connections transferred from the Participating Institutions to NAMA and these connections were subject to specific impairment assessment at 31 December 2012. This resulted in a lower number of loans and receivables being collectively assessed for impairment.
Further information on the impairment of loans and receivables is included in Note 3, Critical accounting estimates and judgements, Note 19, Loans and receivables and Note 22, Credit Risk.