This section describes several examples of the ledger entries that result when you use collective/group-level Expected Credit Loss (ECL) with US GAAP.
Expected Credit Losses: Initial Entry
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Held To Maturity | Acct # | Description | Local Dr | Cr | Base Dr | Cr | ||||
|---|---|---|---|---|---|---|---|---|---|---|
Transaction 1 | ECL Local | FX Rate | ECL Base | 1010010419 | Allowance for ECL-HTM | 200.00 | 200.00 | |||
1/15/2017 | Book ECL Collective Level panel | 200.00 | 1.00 | 200.00 | 5001000902 | Impairment Expense for ECL-HTM | 200.00 | 200.00 | ||
Held To Maturity | Acct # | Description | Local Dr | Cr | Base Dr | Cr | ||||
Transaction 1 | ECL Local | FX Rate | ECL Base | 1010010419 | Allowance for ECL-HTM | 200.00 | 250.00 | |||
1/15/2017 | Book ECL Collective Level panel | 200.00 | 0.80 | 250.00 | 5001000902 | Impairment Expense for ECL-HTM | 200.00 | 250.00 |
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New Local Amount 300 Current Fx Rate .75
New Base Amount 383.33 (250 + (100 ecl increase/.75) = 383.33)
Held To Maturity | Acct # | Description | Local Dr | Cr | Base Dr | Cr | ||||
|---|---|---|---|---|---|---|---|---|---|---|
Transaction 2 | ECL Local | FX Rate | ECL Base | 1010010419 | Allowance for ECL-HTM | (200.00) | (250.00) | |||
2/15/2017 | Book ECL Collective Level panel | 300.00 | 0.75 | 5001000902 | Impairment Expense for ECL-HTM | (200.00) | (250.00) | |||
ECL Prev | 200.00 | 250.00 | 1010010419 | Allowance for ECL-HTM | 300.00 | 383.33 | ||||
| Increase | 100.00 | 0.75 | 133.33 | 5001000902 | Impairment Expense for ECL-HTM | 300.00 | 383.33 | |||
| Total ECL | 300.00 | 383.33 |
Expected Credit Losses: ECL Decrease
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ECL local amount reduction = 40%. New base amount = 230 (383.33 – (.40 *383.33 previous base))
Held To Maturity | Acct # | Description | Local Dr | Cr | Base Dr | Cr | ||||
|---|---|---|---|---|---|---|---|---|---|---|
Transaction 2 | ECL Local | FX Rate | ECL Base | 1010010419 | Allowance for ECL-HTM | (300.00) | (383.33) | |||
2/15/2017 | Book ECL Collective Level panel | 180.00 | NO FX RATE | 230.00 | 5001000902 | Impairment Expense for ECL-HTM | (300.00) | (383.33) | ||
ECL Prev | 300.00 | 383.33 | 1010010419 | Allowance for ECL-HTM | 180.00 | 230.00 | ||||
| 5001000902 | Impairment Expense for ECL-HTM | 180.00 | 230.00 |