Sell Transactions ECL Scenarios

The following scenarios describe ledger entries for Sell transactions when you use asset-level expected credit loss (ECL).

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.
Lot with expected credit losses of $30 applied:

1. Excusing any subsequent amortization, the lot is fully sold for $850 with the same amortized cost of $900. The following transaction should occur:

   Ledger Account	Ledger Acct Name	Dr	Cr
   1310000100	COST OF INVESTMENTS-FV-OCI		900
   1002000100	INVESTMENT RECEIVABLE	850
   3006000102	REALIZED LOSS ON INVESTMENTS - FV-OCI	20
   3305000406	ALLOWANCE FOR ECL-FV-OCI	30

2. Excusing any subsequent amortization, the lot is fully sold for $950 with the same amortized cost of $900. The following transaction should occur:

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.
Lot with expected credit losses of $30 applied:

1. Excusing any subsequent amortization, the lot is fully sold for $850 with the same amortized cost of $900. The following transaction should occur:

   Ledger Account	Ledger Acct Name	Dr	Cr
   1610000100	COST OF INVESTMENTS-AC		900
   1002000100	INVESTMENT RECEIVABLE	850
   3006000102	REALIZED LOSS ON INVESTMENTS	20
   1610010419	ALLOWANCE FOR ECL-AC	30

Excusing any subsequent amortization, the lot is fully sold for $950 with the same amortized cost of $900. The following transaction should occur:

Sell for US GAAP – AFS

The entity holds an asset, par of 1,000 and a cost of $900, and expected credit losses of $30 applied to it.
Lot with expected credit losses of $30 applied:

1. Excusing any subsequent amortization, the lot is fully sold for $850 with the same amortized cost of $900. The following transaction should occur:

   Ledger Account	Ledger Acct Name	Dr	Cr
   1310000100	COST OF INVESTMENTS-AFS		900
   1002000100	INVESTMENT RECEIVABLE	850
   3006000102	REALIZED LOSS ON INVESTMENTS	50
   1310010419	ALLOWANCE FOR ECL-AFS	30
   5301000902	IMPAIRMENT EXPENSE FOR ECL-AFS		30

Excusing any subsequent amortization, the lot is fully sold for $950 with the same amortized cost of $900. The following transaction should occur:

Sell for US GAAP – HTM

The entity holds an asset, par of 1,000 and a cost of $900, and expected credit losses of $30 applied to it.
Lot with expected credit losses of $30 applied:

1. Excusing any subsequent amortization, the lot is fully sold for $850 with the same amortized cost of $900. The following transaction should occur:

   Ledger Account	Ledger Acct Name	Dr	Cr
   1510000100	COST OF INVESTMENTS-HTM		900
   1002000100	INVESTMENT RECEIVABLE	850
   3006000102	REALIZED LOSS ON INVESTMENTS	50
   1510010419	ALLOWANCE FOR ECL-HTM	30
   5501000902	IMPAIRMENT EXPENSE FOR ECL-HTM		30

2. Excusing any subsequent amortization, the lot is fully sold for $950 with the same amortized cost of $900. The following transaction should occur:

   Ledger Account	Ledger Acct Name	Dr	Cr
   1510000100	COST OF INVESTMENTS-HTM		900
   1002000100	INVESTMENT RECEIVABLE	950
   3006000101	REALIZED GAIN ON INVESTMENTS		50
   1510010419	ALLOWANCE FOR ECL-HTM	30
   5501000902	IMPAIRMENT EXPENSE FOR ECL-HTM		30

   
   
   Important Notes:

• The above Sell examples illustrate what should occur for a full sell.
• For a partial sell across multiple lots, the expected credit losses will be reduced proportional to the portion sold.
• The close lot should reflect the ECL Stage of the targeted open.
• Position-level ECL will be reduced accordingly.