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
The following examples show the ledger entries that post for collective/group-level ECL, Held to Maturity.
Held
...
Acct #
...
Description
...
Local
Dr
Cr
...
Base
Dr
...
to Maturity FX Rate of 1.00
Held To Maturity | ||||||||
|---|---|---|---|---|---|---|---|---|
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-HTM200.00 | 200.00 |
Held To Maturity | Acct # | Description | Local Dr | Cr | Base Dr | Cr | |||
|---|---|---|---|---|---|---|---|---|---|
Transaction 11010010419 | Allowance for ECL | LocalFX Rate | ECL Base | 1010010419 | Allowance -HTM | 200.00 | 200.00 | ||
5001000902 | Impairment Expense for ECL-HTM | 200.00 | 250200.00 |
Held to Maturity FX Rate of .80
Held To Maturity | ||||
|---|---|---|---|---|
Transaction 1 | ECL Local | FX Rate | ECL Base | |
1/15/2017 | Book ECL Collective Level panel | 200.00 | 0.80 | 250.00 |
Acct # | Description | Local Dr | Cr | Base Dr | Cr |
|---|---|---|---|---|---|
1010010419 | Allowance for ECL-HTM | 200.00 | 250.00 | ||
5001000902 | Impairment Expense for ECL-HTM | 200.00 | 250.00 |
...
New Local Amount 300 Current Fx Rate .75
New Base Amount 383.33 (250 + (100 ecl increase/.75) = 383.33)
Held To Maturity |
|---|
Description
Local
Dr
Cr
Base
Dr
Cr
Transaction 2 | ECL Local | FX Rate | ECL Base |
1010010419
Allowance for ECL-HTM
2/15/2017 | Book ECL Collective Level panel | 300.00 | 0.75 | |
ECL Prev | 200.00 |
250.00 |
2/15/2017
| Increase | 100.00 | 0.75 | 133.33 | |
| Total ECL | 300.00 |
0.75
5001000902
| 383.33 |
Acct # | Description | Local Dr | Cr | Base Dr | Cr |
|---|---|---|---|---|---|
1010010419 | Allowance for ECL-HTM | (200.00) | (250.00) |
ECL Prev
5001000902 | Impairment Expense for ECL-HTM | (200.00) | (250.00) | ||
1010010419 | Allowance for ECL-HTM | 300.00 | 383 |
. |
33 | |
| 5001000902 | Impairment Expense for ECL-HTM |
| 300.00 | 383.33 |
Expected Credit Losses: ECL Decrease
...
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
Transaction 2 | ECL Local | FX Rate | ECL Base |
1010010419
(300.00)
(383.33)
2/15/2017 | Book ECL Collective Level panel | 180.00 | NO FX RATE | 230.00 |
5001000902
ECL Prev | 300.00 | 383.33 | ||
Acct # | Description | Local Dr | Cr | Base Dr | Cr |
|---|---|---|---|---|---|
1010010419 | Allowance for ECL-HTM | (300.00) | (383.33) | ||
5001000902 | Impairment Expense for ECL |
-HTM | (300.00) | (383.33) | |||
1010010419 | Allowance for ECL-HTM | 180.00 | 230.00 | ||
| 5001000902 | Impairment Expense for ECL-HTM | 180.00 | 230.00 |