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The following scenarios describe ledger entries for Conversion/Buy/Receive transactions when you use asset-level expected credit loss (ECL) .
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.
Ledger Account
Ledger Acct Name
Dr
Cr
1610000100
COST OF INVESTMENTS-AC
1,000
9999999992
CONVERSION COST
1,000
3003000100
ACCUMULATED UNDISTRIBUTED INCOME(LOSS)
30
1610010419
ALLOWANCE FOR ECL-AC
with a GAAP accounting basis.
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 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 |
---|
Ledger Account
Ledger Acct Name
Dr
Cr
1310000100
COST OF INVESTMENTS-AFS
1,030
9999999992
CONVERSION COST
1,000
1310010419
1010000100 | 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.
1010010419 | 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.
Ledger Account | Ledger Acct Name | Dr | Cr |
---|
1010000100 | COST OF INVESTMENTS-HTM | 1,000 | |
9999999992 | CONVERSION COST | 1,000 | |
3003000100 | ACCUMULATED UNDISTRIBUTED INCOME(LOSS) | 30 |
1010010419 | ALLOWANCE FOR ECL-HTM |
30
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.
Ledger Account
Ledger Acct Name
Dr
Cr
1310000100
COST OF INVESTMENTS-FV-OCI
1,000
2002000100
INVESTMENT PAYABLE
1,000
5301000902
30 |
3305000406
ALLOWANCE FOR ECL-FV-OCI
Receive/Buy for
IFRS – Amortized CostThe ledger entries follow for an IFRS accounting basis with an AC (Amortized Cost) regulatory category.
Ledger Account
Ledger Acct Name
Dr
Cr
1610000100
COST OF INVESTMENTS-AC
1,000
2002000100
INVESTMENT PAYABLE
1,000
5601000902
IMPAIRMENT EXPENSE FOR ECL-AC
30
1610010419
ALLOWANCE FOR ECL-AC
30
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 |
---|
1010000100 | COST OF INVESTMENTS-AFS | 1,030 | |
2002000100 | INVESTMENT PAYABLE | 1,000 |
1010010419 | 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.
Ledger Account | Ledger Acct Name | Dr | Cr |
---|
1010000100 | COST OF INVESTMENTS-HTM | 1,000 | |
2002000100 | INVESTMENT PAYABLE | 1,000 |
5001000902 | IMPAIRMENT EXPENSE FOR ECL-HTM | 30 |
1010010419 | ALLOWANCE FOR ECL-HTM | 30 |
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.
Ledger Account | Ledger Acct Name | Dr | Cr |
---|
1010000100 | COST OF INVESTMENTS-HTM | 1,030 | |
2002000100 | INVESTMENT PAYABLE | 1,000 |
1010010419 | ALLOWANCE FOR ECL-HTM | 30 |
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