Suppose after completion of an application or module, if another module is to be added, then we need to test the new module as well as the impacted area which is affected by adding a new module.
Impact Analysis will be done to find the impact area of the application by adding a new module. Generally team lead will take the initiate for this.
Team lead will send a mail to client asking for the impact area (if developer is new to domain), also send a mail to development team and testing team asking for the impacted area. After getting the response of all three, team lead will do the consolidated report of all the mails. This consolidated mail will be given to the Test Engineer saying this is the Impact Analysis Report and these are the impact areas.