Process Transactions with the Book Asset-Level Panel
To book an asset-level ECL lot adjustment transaction to debt security lots:
In Accounting Center, in the left navigation pane, click Transactions > Adjustments > Expected Credit Loss Transactions > Book Asset-Level.
You see the Book Asset-Level panel.In the Entity Information section, specify the entity and accounting basis associated with the lot you are adjusting.
You see the entity base currency, and the regulatory category and ECL Method for the selected entity/basis grouping.In the Security Information by Option section, identify the security associated with the lot you are adjusting.
In the Accounting Information section, identify the lot you are adjusting and date criteria.
If you are entering an initial transaction, you can set ECL Transition to Yes to have the option to the change the Purchased Impaired value for your initial transaction.
The options available on the panel vary if you are adjusting a lot that uses Non-US Treatment with regulatory categories of FVOCI/AC or a lot that uses US Treatment with regulatory categories of AFS/HTM.If you adjust a lot using Non-US Treatment ECL Method (IFRS) with a regulatory category of FVOCI/AC, you can update the ECL Stage field value.
You can view the Prior ECL Stage value.If you adjust a lot using US Treatment ECL Method (GAAP) with a regulatory category of AFS:
- You can update the Regulatory Intent Information field to Intent to Sell, Likely required to Sell, or Not Likely Required to Sell.
- If you select Not Likely Required to Sell, you can update the Non-Credit Loss Local field value. This allows you to book non-credit loss adjustments for AFS securities that have a regulatory intent of Not LIkely Required to Sell.Under Expected Credit Loss Information, in the Local Loss Allowance box, specify the expected credit loss allowance.
In the Expected Credit Loss Activity section, you can review previous expected credit loss allowance information.Complete the remaining options on the Book Asset-Level panel, as needed.
For more information about each option, see the following table.Click Submit.
After you make a lot adjustment, you can view the adjustment activity on the Open Adjustments tab of the Cost object within the Position Viewer tool. Any subsequent ECL transactions to the same ECL position insert an adjustment row in order to update the balance or other information. When you update the current balance, regulatory intent, or stage, the system moves the current value to a “previous” field on the adjustment row in order to store the prior value.
??? Review prior paragraph. do we need an example?
Book Asset-Level Panel Options
In the Book Asset-Level panel, you can apply expected credit losses (ECL) to debt security lots as an adjustment entry. Note that options may vary according to your selections.
Option
Tag
Description
Entity Information
Entity ID
1163
Specifies the unique identifier of the entity.
Entity Name
1164
Specifies the abbreviated name of the entity.
Accounting Basis
21
Specifies the accounting basis. The system can apply expected credit losses to lots with an Accounting Basis of IFRS or GAAP.
Base Currency
86
Displays the base currency of the entity.
Regulatory Category
12387
Displays the regulatory category associated with International Financial Reporting Standards (IFRS) associated with the selected entity/accounting basis. You can apply expected credit losses to lots with regulatory categories of:
FVOCI/AC that have an ECL Method of Non-US Treatment. This applies to IFRS bases.
AFS/HTM that have an ECL Method of US Treatment. This applies to GAAP bases.
ECL Method
18053
Displays the method that the system uses to process asset-level expected credit losses for the selected entity/accounting basis associated with the lot, as follows:
Non-US Treament. Identifies the accounting basis that follows IFRS regulatory treatments for Expected Credit Losses.
US Treatment. Identifies the accounting basis that follows US GAAP regulatory treatments for Expected Credit Losses.
Security Information
Event Type
55
Displays the type of event. For example, ADJ_ECL_ASSET.
Cross Reference Type
1234
Specifies the cross reference type associated with the security.
Cross Reference ID
1233
Specifies the cross reference identifier associated with the security.
Issue Name
961
Specifies the name of the security.
Instrument Type
11
Displays the security's investment type. For example, FI (fixed income).
Asset Currency
85
Displays the currency in which the security is priced.
Maturity Date
38
Displays the date the final principal payment is due on the security.
Coupon Rate
70
Displays the rate at which the security accrues interest. It is expressed as an annual rate.
Accounting Information
Choose Open Lot
962
Allows you to select an open lot for asset-level ECL processing. The lookup displays a list of open lots that met your criteria. Each row shows Event, Trade Date, Acquisition Date values.
Acquisition Date
216
Displays the original acquisition date for the selected open lot.
Effective Date
35
Specifies the effective date as of which the expected credit loss transaction is applied. The effective date cannot be greater than the accounting date. You must specify a date less than or equal to the current date. The current date is the default value.
Accounting Date
36
Specifies the date the transaction is reported. The accounting date must be greater than or equal to the effective date. The current date is the default value.
Settlement Date
37
Displays the date the trade is settled.
Target Event ID
26
Displays the target event ID type.
Trade Quantity
159
Displays the quantity of the open adjustment event.
Unit Price
160
Specifies the price of the security per unit.
Local Current Cost
128
Displays the current identified cost basis in local currency.
Base Current Cost
129
Displays the current identified cost basis in base currency.
Purchased Impaired
16999
Specifies whether the displayed lot is credit impaired. Options include No and Yes. This option is available only if you set ECL Transition to Yes. Otherwise, the field is locked.
ECL Transition
18075
Indicates whether you are entering a lot adjustment transaction during the period where existing Eagle Accounting clients are adopting ECL functionality for the first time, and need the ability to change the Purchased Impaired status. Options include:
Yes. Identifies the initial expected credit loss transaction entered on the lot. When you select Yes, the Purchased Impaired field becomes available. If necessary, you can update a lot with a previously purchased impaired status of No to Yes. For all subsequent transactions on the lot, the ECL Transition election is set to No and the Purchased Impaired election is locked.
No. Does not identify the initial expected credit loss transaction entered on the lot. The Purchased Impaired election is locked.
Credit Quality Stage Information
ECL Stage
7001
Identifies the Expected Credit Loss stage. The stage tracks the credit quality status of financial instruments. This field appears only for long fixed income lots that have an ECL Method field value of Non-US Treatment (IFRS) with regulatory categories of FVOCI/AC. Options include:
Stage 1. Have not deteriorated significantly in credit quality or have low credit risk.
Stage 2. Deteriorated significantly in credit quality since initial recognition (unless low credit risk at reporting date) and not having objective evidence of impairment.
Stage 3. The system assigns this value if you set Purchased Impaired to Yes.
Previous ECL Stage
16989
Displays the previous ECL stage during processing for the selected lot criteria. This field appears only for long fixed income lots that have an ECL Method field value of Non-US Treatment with regulatory categories of FVOCI/AC.
Regulatory Intent Information
Regulatory Intent
2921
Indicates the regulatory intent for lots that have a regulatory category of AFS (Available for Sale). Options include:
Intent to Sell. If you select this value, you cannot specify a value for the Local Loss Allowance field. However, you can submit the event to update the intent status on the lot. If you update the status to Intent to Sell, the system reverses/backs out any current expected credit losses on the lot.
Likely Required to Sell. If you select this value, you cannot specify a value for the Local Loss Allowance field. However, you can submit the event to update the intent status on the lot. If you update the status to Likely Required to Sell, the system reverses/backs out any current expected credit losses on the lot.
Not Likely Required to Sell. Default. If you select this value, you can specify a value for the Local Loss Allowance field to enter an expected credit loss amount.
Previous Regulatory Intent
18046
Displays the previous Regulatory Intent value during processing for the selected lot criteria. This field appears if you select a lot with a Regulatory Category of AFS.
Expected Credit Loss Information
Local Loss Allowance
16990
Specifies the value of the local Expected Credit Loss allowance.
If the lot has a regulatory category of AFS (Available for Sale) and you set the Regulatory Intent to a value of Intent to Sell or Likely Required to Sell, you cannot specify a value for this field. If the lot has a regulatory category of AFS (Available for Sale) and you set the Regulatory Intent to a value of Not Likely Required to Sell, you can specify a value for this field.
Local to Base FX Rate
87
Specifies the foreign exchange rate used to calculate the Base Loss Allowance. This is the local to base exchange rate. If you do not select a foreign denomination, this field is unavailable.
WRITERS NOTE: is it ever editable and when? does it display only under certain conditions?
Base Loss Allowance
16991
Specifies the value of the base Expected Credit Loss allowance. The system uses the current local-to-base exchange rate to calculate the base allowance amount for ECL transactions where the security is foreign denominated. If you do not select a foreign denomination, this field is unavailable.
WRITERS NOTE: only appears for ECL Transition FX ? confirm conditions when this field appears
Expected Credit Loss Activity
Prev ECL Local
7350
Displays the previous value for the Local Loss Allowance. When you update the current balance or stage, the system moves the current value to this previous field to store the prior value.
Prev ECL Base
7430
Displays the previous value for the Base Loss Allowance.
ECL Delta Local
7351
Displays the local ECL delta value.
WRITERS NOTE: determine conditions when these 3 fields appear. Non US Treatment? Foreign?
Local to Base FX Rate
7961
Displays the foreign exchange rate used to calculate the ECL Delta Base. This is the local to base exchange rate.
WRITERS NOTE: determine conditions when these 3 fields appear. Non US Treatment? Foreign?
ECL Delta Base
7431
Displays the value of the base ECL delta. The system uses the current local-to-base exchange rate to calculate the base delta amount for ECL transactions where the security is foreign denominated.
WRITERS NOTE: determine conditions when these 3 fields appear. Non US Treatment? Foreign?
Total ECL Base = Prev Base + Delta Base
7432
Displays the Total ECL Base value. This represents the Prev ECL Base field previous value for the Base Loss Allowance plus the EC: De;ta Base field delta base.
Non-Credit Loss Information
Prev Non-Credit Loss Local
2702
Displays the lot’s previous Non-Credit Loss Local amount. This field appears for lots with a US Treatment ECL Method (GAAP) with a regulatory category of AFS when you set the Regulatory Intent to a value of Not Likely Required to Sell.
WRITERS NOTE: confirm conditions when this section appears
Prev Non-Credit Loss Base
2703
Displays the lot’s previous Non-Credit Loss Base amount. This field appears for lots with a US Treatment ECL Method (GAAP) with a regulatory category of AFS when you set the Regulatory Intent to a value of Not Likely Required to Sell.
Non-Credit Loss Local
2704
To apply an expected credit loss adjustment to a lot when you use IFRS, you must have an accounting basis with the ECL Method set to Non-US Treatment with regulatory categories of FVOCI/AC. You can update the expected credit loss amount or the stage.
The panel displays lot detail information, such as quantity, trade date, settlement date, current cost, and allows you to specify information specific to expected credit losses. For your initial expected credit loss transaction on the lot, you can select the ECL Transition option if you need the ability to change the Purchased Impaired status.
Process Transactions with the Book ECL Asset-Level Panel
To book an asset-level ECL lot adjustment transaction to debt security lots when using IFRS:
In Accounting Center, in the left navigation pane, click Transactions > Adjustments > Expected Credit Loss Transactions > Book ECL Asset-Level.
You see the Book ECL Asset-Level panel.In the Entity Information section, specify the entity and accounting basis associated with the lot you are adjusting.
You see the entity base currency, and the regulatory category and ECL Method for the selected entity/basis grouping. Because you selected an entity with an accounting basis of IFRS, the Regulatory Category is AC or FVOCI, and the ECL Method is Non-US Treatment.In the Security Information by Option section, identify the security associated with the lot you are adjusting.
In the Accounting Information section, identify the lot you are adjusting and date criteria.
If you are entering an initial transaction, you can set ECL Transition to Yes to have the option to the change the Purchased Impaired value for your initial transaction.
The options available on the panel vary if you are adjusting a lot that uses the Non-US Treatment ECL method for IFRS with regulatory categories of FVOCI/AC or a lot that uses the US Treatment ECL method for US GAAP with regulatory categories of AFS/HTM.In the Credit Quality Stage Information section, if you adjust a lot using Non-US Treatment ECL Method (IFRS) with a regulatory category of FVOCI/AC, you can update the ECL Stage field value.
You can view the Prior ECL Stage value.In the Expected Credit Loss Information section,in the Local Loss Allowance box, specify the expected credit loss allowance.
In the Expected Credit Loss Activity section, you can review previous expected credit loss allowance information.
In the Other Information section,complete the remaining options on the Book ECL Asset-Level panel, as needed.
Click Submit.
The following table describes these options in detail. After you make a lot adjustment, you can view the adjustment activity on the Open Adjustments tab of the Cost object within the Position Viewer tool. Any subsequent ECL transactions to the same ECL position inserts an adjustment row in order to update the balance or other information. When you update the current balance or stage, the system moves the current value to a “previous” field on the adjustment row in order to store the prior value.
Book ECL Asset-Level Panel Example for IFRS
In the following figure, you use the Book ECL Asset-Level panel with an entity/basis for IFRS, where the ECL Method is Non-US Treatment and the Regulatory Category is AC (Amortized Cost). Under Credit Quality Stage Information, notice that you set ECL Stage to Stage 2.
Book ECL Asset-Level Panel Options
| Excerpt | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
In the Book ECL Asset-Level panel, you can apply expected credit losses (ECL) to debt security lots as an adjustment entry. Note that options may vary according to your selections. The options available on the panel vary if you are adjusting a lot that uses an ECL method of Non-US Treatment with regulatory categories of FVOCI/AC for use with IFRS or a lot that uses an ECL method of US Treatment with regulatory categories of AFS/HTM for use with US GAAP.
|
|
|
Other Information
Trade Ticket Number
761
Specifies the origin of the trade ticket number.
Transaction Notes
56
Specifies the comments about the transaction.
Sample Panel US GAAP
In the following figure, you use the Book-Asset Level panel with an entity/basis for GAAP, where the ECL Method is US Treatment and the Regulatory Category is AFS (Available for Sale). Under Regulatory Intent Information, notice that you set Regulatory Intent to
|
Sample Panel IFRS
In the following figure, you use the Book-Asset Level panel with an entity/basis for IFRS, where the ECL Method is Non-US Treatment and the Regulatory Category is AC (Amortized Cost). Under Credit Quality Stage Information, notice that you set ECL Stage to Stage 2.
|