Book Collective-Level ECL Transactions for US GAAP

WRITERS NOTE: NEEDS REVIEW how differs from IFRS?

In the Book ECL Collective Level panel, you can manually enter collective-level, or group-level, Expected Credit Loss (ECL) transactions for securities with a processing security type of Expected Credit Loss Group (ECLGRP) for US GAAP portfolios where the regulatory category and investments are classified as Held To Maturity (HTM).

You can:

Book ECL against domestic or foreign assets to capture all collective-level accounting.
Book ECL against foreign assets where the accounting system properly differentiates between increases and decreases, and accounts for them differently to properly capture variations in FX rate.

Collective-level ECL transactions are basic-specific events. These transactions/events process only on the accounting basis you specify in the panel, even in cases when the entity has more than one accounting basis. After you enter the local expected credit loss amount, the panel uses the current local-to-base exchange rate to calculate the base allowance amount for ECL transactions where the security is foreign denominated. Eagle Accounting can differentiate between increasing expected credit lossses for a dummy asset and decreasing expected credit losses for a dummy asset, and accounts for them differently to properly capture variations in FX rate. For more information, see Collective-Level ECL Examples for US GAAP.

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Cancel ECL Adjustments

Process ECL Transactions at the Collective Level for US GAAP

To process collective-level ECL transactions:

In Accounting Center, in the left navigation pane, click Transactions > Adjustments > Expected Credit Loss Transactions > Book ECL Collective Level.
You see the Book ECL Collective Level panel. An example follows.
In the Entity Information section, select the entity/basis for the transaction.
In the Issue Information section, specify the Trade Date and Accounting Date, and select the dummy asset ID used for collective-level accounting.
In the Expected Credit Loss Information section, enter the Local Loss Allowance value and the Local to Base FX Rate, if the security has a foreign denomination.
Complete the remaining options in the Book ECL Collective Level panel.
For more information about each option, see the following table.
Click Submit.

Book ECL Collective Level Panel Example

An example of the Book ECL Collective Level panel follows.

Book ECL Collective Level Panel Options

The following are the options in the Book ECL Collective Level panel.

Option	Tag	Description
Entity Information
Entity ID	1163	Specifies the unique identifier of the entity.
Entity Name	1164	Specifies the name of the entity.
Accounting Basis	21	Specifies the accounting basis for the selected entity to process. You can select an accounting basis of IFRS. NOTE: Collective-level ECL transactions are basic-specific events. These transactions/events process only on the accounting basis you specify in the panel, even in cases when the entity has more than one accounting basis.
Base Currency	86	Displays the base currency of the entity.
Regulatory Category	12387	Displays the regulatory category associated with International Financial Reporting Standards (IFRS) for the selected entity/accounting basis grouping. You can process collective-level ECL for a GAAP accounting basis only when the regulatory category is Held to Maturity (HTM).
Issue Information
Trade Date	35	Specifies the effective date to use for processing. The ECL effective date must be equal to the accounting date.
Accounting Date	36	Specifies the accounting date for the entity to use for processing. The accounting date must be open.
Monthly Accounting Date	4733	Displays the month end accounting date for the entity. For example, this date occurs in January.
Event Type	55	Displays the business intent of the transaction. Shows a value of ADD_ECL_GROUP.
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.
Asset Currency	85	Displays the local currency of the security.
Expected Credit Loss Information
Local Loss Allowance	16990	Specifies the value of the local Expected Credit Loss allowance. This is the local expected credit loss amount.
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. You can specify a value only if you select a foreign denominated security. Otherwise, the field is locked.
Base Loss Allowance	16991	Displays the base expected credit loss amount. 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.
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.
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.
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.
Total ECL Base = Prev Base + Delta Base	7432	Displays the Total ECL Base value. This represents the previous value for the Base Loss Allowance plus the delta base.
Other Information
Trade Ticket Information	761	Contains the trade ticket identification number.
Transaction Notes	56	Contains user defined information about the transaction.