The following information helps to explain collective-level, or /group-level , Expected Credit Losses (ECL) when you use IFRS.
About Tracking Stages with Collective/Group-Level ECL
With collective/group-level ECL used in conjunction with IFRS, you can track changes related to the stage, or status of /credit quality of collective-level financial instruments. You identify the stage at the transaction level rather than for the SMF. These statuses include:
Stage 1. Have not deteriored deteriorated significantly in credit quality or have low credit risk.
Stage 2. Deteriorated significantly in credit qualtity quality since initial recognition (unless low credit risk at reporting date) and not having objected objective evidence of impairment.
Stage 3. N/A (Collective/group-level assets cannot be accounted for in Stage 3. You must perform ECL accounting for any Stage 3 assets at the asset level.)
About ECL Groupings
When you use collective/group-level ECL, a portfolio can have multiple groupings in both stages (1 and 2) within same portfolio as well as multiple groupings within same stages. An entity portfolio can have multiple collective/group-level ECL positions segmented by both currency and stage. Collective/group-level ECL can represent Stage 1 and 2 assets only.
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