Conversion/Buy/Receive Transactions ECL Scenarios for US GAAP

The following scenarios describe ledger entries for Conversion/Buy/Receive transactions when you use asset-level expected credit loss (ECL) with a GAAP accounting basis. 

Conversion for US GAAP - AFS

On 1 January 2020, the entity converts a lot at a cost of $1,000, with established expected credit losses of $30. The lot is flagged with Regulatory Intent set to Not Likely Required to Sell, which has no accounting impact but is stored on the lot.

The ledger entries follow for a GAAP accounting basis with an AFS (Available for Sale) regulatory category. .

Conversion for US GAAP – HTM

On 1 January 2020, the entity converts a lot at a cost of $1,000, with established expected credit losses of $30. Note that Regulatory Intent is not tracked on HTM positions.

The ledger entries follow for a GAAP accounting basis with an HTM (Held to Maturity) regulatory category. 

Receive/Buy for US GAAP – AFS (Purchased Impaired Asset)

The entity purchases an impaired lot at a cost of $1,000, with expected credit loss of $30. The entry is flagged as Purchased Impaired. Note that you can only enter expected credit losses on a GAAP/AFS Receive or Buy when it is flagged as Purchased Impaired.

The ledger entries follow for a GAAP accounting basis with an AFS (Available for Sale) regulatory category. 

Receive/Buy for US GAAP – HTM

The ledger entries follow for a GAAP accounting basis with an HTM (Held to Maturity) regulatory category. 

Receive/Buy for US GAAP – HTM (Purchased Impaired Asset)

The entity purchases an impaired lot at a cost of $1,000, with expected credit losses of $30. The entry is flagged as Purchased Impaired.

The ledger entries follow for a GAAP accounting basis with an HTM (Held to Maturity) regulatory category.