This section introduces some concepts used with asset-level Expected Credit Losses (ECL) for IFRS accounting bases.
About the Non-US Treatment ECL Method
Eagle’s accounting solution offers two methodologies for processing for asset-level Expected Credit Losses. It uses the ECL Method of Non-US Treatment for processing IFRS accounting bases. If you use US GAAP accounting bases, the ECL Method of US Treatment is also available.
About Tracking Stages with Asset-Level ECL
With asset-level ECL used in conjunction with IFRS, you can track changes related to the stage, or status of credit quality of fixed income financial instruments. You identify the stage at the transaction level rather than for the SMF. These statuses include:
Stage 1. Have not deteriored significantly in credit quality or have low credit risk.
Stage 2. Deteriorated significantly in credit qualtity since initial recognition (unless low credit risk at reporting date) and not having objected evidence of impairment.
Stage 3.
WRITERS NOTE: do we have a definition for the meaning of Stage 3?It goes to Stage 3 if the trade is credit impaired.
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