The following scenarios describe ledger entries for Sell transactions when you use asset-level expected credit loss (ECL) with an IFRS accounting basis.
The following notes apply to these Sell scenarios:
These Sell examples illustrate what should occur for a full sell.
For a partial sell across multiple lots, the expected credit losses are reduced proportional to the portion sold.
The close lot should reflect the ECL Stage of the targeted open.
Position-level ECL is reduced accordingly.
Sell for IFRS – FVOCI
The entity holds an asset, par of 1,000 and a cost of $900, and expected credit losses of $30 applied to it.
Ledger entries follow for a lot with expected credit losses of $30 applied for an IFRS accounting basis with an FVOCI (Fair Value - Other Comprehensive Income) regulatory category.
Ledger Account
Ledger Acct Name
Dr
Cr
1010000100
COST OF INVESTMENTS-FV-OCI
900
2002000100
INVESTMENT PAYABLE
900
5001000902
IMPAIRMENT EXPENSE FOR ECL-FV-OCI
30
3005000406
ALLOWANCE FOR ECL-FV-OCI
30
Sell with Realized Loss
Excusing any subsequent amortization, the lot is fully sold for $850 with the same amortized cost of $900.
The following transaction occurs.
Ledger Account
Ledger Acct Name
Dr
Cr
1010000100
COST OF INVESTMENTS-FV-OCI
900
1002000100
INVESTMENT RECEIVABLE
850
4004000102
REALIZED LOSSES - FV-OCI
20
3005000406
ALLOWANCE FOR ECL-FV-OCI
30
3003000302
UNREALIZED LOSSES FV-OCI - OCI
20
3006000104
REALIZED LOSSES FV-OCI FROM OCI
20
Sell with Realized Gain
Excusing any subsequent amortization, the lot is fully sold for $950 with the same amortized cost of $900.
The following transaction occurs.
Ledger Account
Ledger Acct Name
Dr
Cr
1010000100
COST OF INVESTMENTS-FV-OCI
900
1002000100
INVESTMENT RECEIVABLE
950
4004000101
REALIZED GAINS - FV-OCI
80
3005000406
ALLOWANCE FOR ECL-FV-OCI
30
3003000301
UNREALIZED GAINS FV-OCI - OCI
80
3006000103
REALIZED GAINS FV-OCI from OCI
80
Sell for IFRS – AC
The entity holds an asset, par of 1,000 and a cost of $900, and expected credit losses of $30 applied to it.
Ledger entries follow for a lot with expected credit losses of $30 applied for an IFRS accounting basis with an AC (Amortized Cost) regulatory category.
Ledger Account
Ledger Acct Name
Dr
Cr
1010000100
COST OF INVESTMENTS-AC
900
2002000100
INVESTMENT PAYABLE
900
5001000902
IMPAIRMENT EXPENSE FOR ECL-AC
30
1010010419
ALLOWANCE FOR ECL-AC
30
Sell with Realized Loss
Excusing any subsequent amortization, the lot is fully sold for $850 with the same amortized cost of $900.
The following transaction occurs.
Ledger Account
Ledger Acct Name
Dr
Cr
1010000100
COST OF INVESTMENTS-AC
900
1002000100
INVESTMENT RECEIVABLE
850
4004000102
REALIZED LOSSES-AC
20
1010010419
ALLOWANCE FOR ECL-AC
30
Sell with Realized Gain
Excusing any subsequent amortization, the lot is fully sold for $950 with the same amortized cost of $900.
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