The following scenarios describe ledger entries for Sell transactions when you use asset-level expected credit loss (ECL) with a GAAP 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.
Position-level ECL is reduced accordingly.
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
1010000100
COST OF INVESTMENTS-AFS
900
2002000100
INVESTMENT PAYABLE
900
5001000902
IMPAIRMENT EXPENSE FOR ECL-AFS
30
1010010419
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
1010000100
COST OF INVESTMENTS-AFS
900
1002000100
INVESTMENT RECEIVABLE
850
4004000102
REALIZED LOSSES-AFS
50
1010010419
ALLOWANCE FOR ECL-AFS
30
5001000902
IMPAIRMENT EXPENSE FOR ECL-AFS
30
3003000302
UNREALIZED LOSSES - AFS - OCI
50
3006000104
REALIZED LOSSES- AFS FROM OCI
50
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-AFS
900
1002000100
INVESTMENT RECEIVABLE
950
4004000101
REALIZED GAINS-AFS
50
1010010419
ALLOWANCE FOR ECL-AFS
30
5001000902
IMPAIRMENT EXPENSE FOR ECL-AFS
30
3003000301
UNREALIZED GAINS-AFS-OCI
50
3006000103
REALIZED GAINS-AFS FROM OCI
50
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
1010000100
COST OF INVESTMENTS-HTM
900
2002000100
INVESTMENT PAYABLE
900
5001000902
IMPAIRMENT EXPENSE FOR ECL-HTM
30
1010010419
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
1010000100
COST OF INVESTMENTS-HTM
900
1002000100
INVESTMENT RECEIVABLE
850
4004000102
REALIZED LOSSES-HTM
50
1010010419
ALLOWANCE FOR ECL-HTM
30
5001000902
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
1010000100
COST OF INVESTMENTS-HTM
900
1002000100
INVESTMENT RECEIVABLE
950
4004000101
REALIZED GAINS-HTM
50
1010010419
ALLOWANCE FOR ECL-HTM
30
5001000902
IMPAIRMENT EXPENSE FOR ECL-HTM
30
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