The balance of the loan is different from what you (as a lender) have to put the loan on the books for. Even if there is no way to legally discharge it, if it's

The balance of the loan is different from what you (as a lender) have to put the loan on the books for. Even if there is no way to legally discharge it, if it's unlikely that the loan will be paid back (or part of it), you have to value it for the amount you expect to receive.