User Scenarios
Expected Credit Losses – Initial entry
The following examples show the ledger entries that post for collective level ECL, Held to Maturity.
Expected Credit Losses – ECL Increase
An ECL increase describes the situation where the new ECL local amount is greater than the previous local amount. For a domestic increase the new local and base amounts are equal. For a foreign increase, the new base amount will be equal to the prior base amount plus the base delta.
Example: Previous Local Amount 200
Previous Base amount 250
New Local Amount 300 Current Fx Rate .75
New Base Amount 383.33 (250 + (100 ecl increase/.75) = 383.33)
Expected Credit Losses – ECL Decrease
An ECL decrease describes the situation where the new ECL local amount is less than the previous local amount. For domestic decrease the new local and base amounts are equal. For a foreign decrease, the new base amount is calculated by taking the previous base amount and reducing it proportional to the local change, ignoring any FX rate.
Example: Previous Local Amount 300
Previous Base Amount 383.33
New Local Amount 180
New Base Amount 230
ECL local amount reduction = 40%. New base amount = 230 (383.33 – (.40 *383.33 previous base)) 
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