Page Comparison

The following scenarios describe ledger entries for Conversion/Buy/Receive transactions when you use asset-level expected credit loss (ECL) with an IFRS accounting basis. 

Conversion for IFRS – FVOCI

On 1 January 2020, the entity converts a lot at a cost of $1,000, with established expected credit losses of $30. The lot is flagged as Stage 1, which has no accounting impact but is stored on the lot.

The ledger entries follow for an IFRS accounting basis with an FVOCI (Fair Value - Other Comprehensive Income) regulatory category.

Conversion for IFRS – Amortized Cost

The ledger entries follow for an IFRS accounting basis with an AC (Amortized Cost) regulatory category.

Conversion for US GAAP - AFS

On 1 January 2020, the entity converts a lot at a cost of $1,000, with established expected credit losses of $30. The lot is flagged with Regulatory Intent  set to Not Likely Required to Sell, which has no accounting impact but is stored on the lot.

The ledger entries follow for a GAAP accounting basis with an AFS (Available for Sale) regulatory category. .

Ledger Account

Ledger Acct Name

Dr

Cr

1310000100

COST OF INVESTMENTS-AFS

1,000

9999999992

CONVERSION COST

1,000

3003000100

ACCUMULATED UNDISTRIBUTED INCOME(LOSS)

 30

1310010419

ALLOWANCE FOR ECL-AFS

 30

Conversion for US GAAP – AFS (Purchased Impaired Asset)

On 1 January 2020, an entity converts a lot at a cost of $1,000, and the converted lot is recognized as Purchased Impaired, that is, Purchased Impaired election on conversion = Yes. You input an expected credit loss amount of $30, which impacts the Amortized Cost of the lot.

The ledger entries follow for a GAAP accounting basis with an AFS (Available for Sale) regulatory category. 

Ledger Account

Ledger Acct Name

Dr

Cr

1310000100

COST OF INVESTMENTS-AFS

1,030

9999999992

CONVERSION COST

1,000

1310010419

ALLOWANCE FOR ECL-AFS

 30

Conversion for US GAAP – HTM

On 1 January 2020, the entity converts a lot at a cost of $1,000, with established expected credit losses of $30. Note that Regulatory Intent is not tracked on HTM positions.

The ledger entries follow for a GAAP accounting basis with an HTM (Held to Maturity) regulatory category. 

Receive/Buy for IFRS – FVOCI

The entity purchases a lot at a cost of $1,000, with expected credit loss of $30. The lot is flagged as Stage 1, which has no accounting impact but is stored on the lot.

The ledger entries follow for an IFRS accounting basis with an FVOCI (Fair Value - Other Comprehensive Income) regulatory category. 

Receive/Buy for IFRS – Amortized Cost

The ledger entries follow for an IFRS accounting basis with an AC (Amortized Cost) regulatory category. 

Receive/Buy for US GAAP – AFS (Purchased Impaired Asset)

The entity purchases an impaired lot at a cost of $1,000, with expected credit loss of $30. The entry is flagged as Purchased Impaired.  Note that you can only enter expected credit losses on a GAAP/AFS Receive or Buy when it is flagged as Purchased Impaired.

The ledger entries follow for a GAAP accounting basis with an AFS (Available for Sale) regulatory category. 

Ledger Account

Ledger Acct Name

Dr

Cr

1310000100

COST OF INVESTMENTS-AFS

1,030

2002000100

INVESTMENT PAYABLE

1,000

1310010419

ALLOWANCE FOR ECL-AFS

 30

Receive/Buy for US GAAP – HTM

The ledger entries follow for a GAAP accounting basis with an HTM (Held to Maturity) regulatory category. 

Receive/Buy for US GAAP – HTM (Purchased Impaired Asset)

The entity purchases an impaired lot at a cost of $1,000, with expected credit losses of $30. The entry is flagged as Purchased Impaired.

The ledger entries follow for a GAAP accounting basis with an HTM (Held to Maturity) regulatory category.