Sell Transactions ECL Scenarios for US GAAP
- Nancy Cohn (Deactivated)
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 |