To apply an expected credit loss adjustment to a lot when you use IFRS, you must have an accounting basis with the ECL Method set to Non-US Treatment with regulatory categories of FVOCI/AC. You can update the expected credit loss amount or the stage.
The panel displays lot detail information, such as quantity, trade date, settlement date, current cost, and allows you to specify information specific to expected credit losses. For your initial expected credit loss transaction on the lot, you can select the ECL Transition option if you need the ability to change the Purchased Impaired status.
To book an asset-level ECL lot adjustment transaction to debt security lots when using IFRS:
In Accounting Center, in the left navigation pane, click Transactions > Adjustments > Expected Credit Loss Transactions > Book Asset-Level.
You see the Book Asset-Level panel.In the Entity Information section, specify the entity and accounting basis associated with the lot you are adjusting.
You see the entity base currencycurrency, and the regulatory category and ECL Method for the selected entity/basis grouping. Because you selected an entity with an accounting basis of IFRS, the Regulatory Category is AC or FVOCI, and the regulatory category and ECL Method for the selected entity/basis groupingis Non-US Treatment.In the Security Information by Option section, identify the security associated with the lot you are adjusting.
In the Accounting Information section, identify the lot you are adjusting and date criteria.
If you are entering an initial transaction, you can set ECL Transition to Yes to have the option to the change the Purchased Impaired value for your initial transaction.
The options available on the panel vary if you are adjusting a lot that uses Non-US Treatment with regulatory categories of FVOCI/AC or a lot that uses US Treatment with regulatory categories of AFS/HTM. If you adjust a lot using Non-US Treatment ECL Method (IFRS) with a regulatory category of FVOCI/AC, you can update the ECL Stage field value.
You can view the Prior ECL Stage valueregulatory categories of AFS/HTM.If you adjust a lot using Non-US Treatment ECL Method (GAAPIFRS) with a regulatory category of AFS:
- You can update the Regulatory Intent Information field to Intent to Sell, Likely required to Sell, or Not Likely Required to Sell.
- If you select Not Likely Required to SellFVOCI/AC, you can update the Non-Credit Loss Local field value. This allows you to book non-credit loss adjustments for AFS securities that have a regulatory intent of Not LIkely Required to Sell ECL Stage field value.
You can view the Prior ECL Stage value.Under Expected Credit Loss Information, in the Local Loss Allowance box, specify the expected credit loss allowance.
In the Expected Credit Loss Activity section, you can review previous expected credit loss allowance information.
Complete Under Other Information, complete the remaining options on the Book Asset-Level panel, as needed.
For more information about each option, see the following table.Click Submit.
The following table describes these options in detail. After you make a lot adjustment, you can view the adjustment activity on the Open Adjustments tab of the Cost object within the Position Viewer tool. Any subsequent ECL transactions to the same ECL position insert inserts an adjustment row in order to update the balance or other information. When you update the current balance , regulatory intent, or stage, the system moves the current value to a “previous” field on the adjustment row in order to store the prior value.
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Book Asset-Level Panel OptionsIn the Book Asset-Level panel, you can apply expected credit losses (ECL) to debt security lots as an adjustment entry. Note that options may vary according to your selections. The options available on the panel vary if you are adjusting a lot that uses Non-US Treatment with regulatory categories of FVOCI/AC or a lot that uses US Treatment with regulatory categories of AFS/HTM.
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2703
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Non-Credit Loss Local
2704
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Other Information
Trade Ticket Number
761
Specifies the origin of the trade ticket number.
Transaction Notes
56
Specifies the comments about the transaction.
Sample Panel US GAAP
In the following figure, you use the Book-Asset Level panel with an entity/basis for GAAP, where the ECL Method is US Treatment and the Regulatory Category is AFS (Available for Sale). Under Regulatory Intent Information, notice that you set Regulatory Intent to
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Sample Panel IFRS
In the following figure, you use the Book-Asset Level panel with an entity/basis for IFRS, where the ECL Method is Non-US Treatment and the Regulatory Category is AC (Amortized Cost). Under Credit Quality Stage Information, notice that you set ECL Stage to Stage 2.