The following scenarios describe ledger entries for Sell transactions when you use asset-level expected credit loss (ECL) with an IFRS 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.
The close lot should reflect the ECL Stage of the targeted open.
Position-level ECL is reduced accordingly.
Sell for IFRS – FVOCI
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 an IFRS accounting basis with an FVOCI (Fair Value - Other Comprehensive Income) regulatory category.
Ledger Account
Ledger Acct Name
Dr
Cr
1310000100
COST OF INVESTMENTS-FV-OCI
900
2002000100
INVESTMENT PAYABLE
900
5301000902
IMPAIRMENT EXPENSE FOR ECL-FV-OCI
30
3305000406
ALLOWANCE FOR ECL-FV-OCI
30
Sell with Realized Loss
WRITER NOTE: SB to provide acct numbers
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
1310000100
COST OF INVESTMENTS-FV-OCI
900
1002000100
INVESTMENT RECEIVABLE
850
3006000102
REALIZED LOSS ON INVESTMENTS - FV-OCI
20
3305000406
ALLOWANCE FOR ECL-FV-OCI
30
Sell with Realized Gain
WRITER NOTE: SB to provide acct numbers for FVOCI
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
1310000100
COST OF INVESTMENTS-FV-OCI
900
1002000100
INVESTMENT RECEIVABLE
950
3006000101
REALIZED GAIN ON INVESTMENTS - FV-OCI
80
3305000406
ALLOWANCE FOR ECL-FV-OCI
30
Sell for IFRS – AC
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 an IFRS accounting basis with an AC (Amortized Cost) regulatory category.
Ledger Account
Ledger Acct Name
Dr
Cr
1610000100
COST OF INVESTMENTS-AC
900
2002000100
INVESTMENT PAYABLE
900
5601000902
IMPAIRMENT EXPENSE FOR ECL-AC
30
1610010419
ALLOWANCE FOR ECL-AC
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
1610000100
COST OF INVESTMENTS-AC
900
1002000100
INVESTMENT RECEIVABLE
850
3006000102
REALIZED LOSS ON INVESTMENTS
20
1610010419
ALLOWANCE FOR ECL-AC
30
Sell with Realized Gain
Excusing any subsequent amortization, the lot is fully sold for $950 with the same amortized cost of $900.
Add Comment