This section describes several examples of the ledger entries that result when you use collective-level, or group-level, Expected Credit Loss (ECL).
Expected Credit Loss: Initial Entry
The following examples show the ledger entries that post for ECL for amortized cost and FVOCI.
Expected Credit Loss:
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Increase
Writeup describes the situation This example describes a scenario where the new ECL local amount is greater than the previous local amount. For domestic writeups increases, the new local and base amounts are equal. For foreign writeupsincreases, the new base amount is equal to the prior base amount plus the base delta.
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New Local Amount 300 Current Fx Rate .75
New Base Amount 383.33 (250 + (100 ecl increase/.75) = 383.33)
Expected Credit Loss:
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Decrease
Writedown describes the situation This example describes a scenario where the new ECL local amount is less than the previous local amount. For domestic writedownsdecreases, the new local and base amounts are equal. For foreign writedownsdecreases, the new base amount is calculated by taking the previous base amount and reducing it proportional to the local change, ignoring any FX rate.
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