- Created by Nancy Cohn on Aug 18, 2020
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The following scenarios describe ledger entries for Sell transactions when you use asset-level expected credit loss (ECL).
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 |
1310000100 | COST OF INVESTMENTS-FV-OCI | 900 | |
2002000100 | INVESTMENT PAYABLE | 900 | |
5301000902 | IMPAIRMENT EXPENSE FOR ECL-FV-OCI | 30 | |
3305000406 | 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 |
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 |
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 |
1310000100 | COST OF INVESTMENTS-FV-OCI | 900 | |
1002000100 | INVESTMENT RECEIVABLE | 950 | |
3006000101 | REALIZED GAIN ON INVESTMENTS - FV-OCI | 80 | |
3305000406 | ALLOWANCE FOR ECL-FV-OCI | 30 |
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 |
1610000100 | COST OF INVESTMENTS-AC | 900 | |
2002000100 | INVESTMENT PAYABLE | 900 | |
5601000902 | IMPAIRMENT EXPENSE FOR ECL-AC | 30 | |
1610010419 | 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 |
1610000100 | COST OF INVESTMENTS-AC | 900 | |
1002000100 | INVESTMENT RECEIVABLE | 850 | |
3006000102 | REALIZED LOSS ON INVESTMENTS | 20 | |
1610010419 | 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.
The following transaction occurs.
Ledger Account | Ledger Acct Name | Dr | Cr |
1610000100 | COST OF INVESTMENTS-AC | 900 | |
1002000100 | INVESTMENT RECEIVABLE | 850 | |
3006000101 | REALIZED GAIN ON INVESTMENTS | 80 | |
1610010419 | ALLOWANCE FOR ECL-AC | 30 |
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.
Ledger entries follow for a lot with expected credit losses of $30 applied for a GAAP accounting basis with an AFS (Available for Sale) regulatory category.
Ledger Account | Ledger Acct Name | Dr | Cr |
1310000100 | COST OF INVESTMENTS-AFS | 900 | |
2002000100 | INVESTMENT PAYABLE | 900 | |
5301000902 | IMPAIRMENT EXPENSE FOR ECL-AFS | 30 | |
1310010419 | ALLOWANCE FOR ECL-AFS | 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 |
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 |
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 |
1310000100 | COST OF INVESTMENTS-AFS | 900 | |
1002000100 | INVESTMENT RECEIVABLE | 950 | |
3006000101 | REALIZED GAIN ON INVESTMENTS | 50 | |
1310010419 | ALLOWANCE FOR ECL-AFS | 30 | |
5301000902 | IMPAIRMENT EXPENSE FOR ECL-AFS | 30 |
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.
Ledger entries follow for a lot with expected credit losses of $30 applied for a GAAP accounting basis with an HTM (Held to Maturity) regulatory category.
Ledger Account | Ledger Acct Name | Dr | Cr |
1310000100 | COST OF INVESTMENTS-HTM | 900 | |
2002000100 | INVESTMENT PAYABLE | 900 | |
5501000902 | IMPAIRMENT EXPENSE FOR ECL-HTM | 30 | |
1510010419 | ALLOWANCE FOR ECL-HTM | 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 |
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 |
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 |
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 |
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