Book Collective/Group-Level ECL Transactions for US GAAP
- Nancy Cohn (Deactivated)
In the Book ECL Collective Level panel, you can manually enter collective/group-level, Expected Credit Loss (ECL) transactions for securities with a processing security type of Expected Credit Loss Group (ECLGRP) for US GAAP portfolios where the regulatory category and investments are classified as Held To Maturity (HTM).
You can:
Book ECL at a collective/group level for a group of domestic or foreign/denominated investments. The collective/group-level ECL for foreign denominated investments is established by local currency.
Book ECL against foreign assets where the accounting system properly differentiates between increases and decreases, and accounts for them differently to properly capture variations in FX rate. Increases for foreign denominated collective/group-level ECL allowances are calculated for base amounts by applying the current FX rate. For decreases for foreign denominated collective/group-level ECL allowances, the base amount is reduced by the proportional decrease in the local ECL allowance
Collective/group-level ECL transactions are basic-specific events. These transactions/events process only on the accounting basis you specify in the panel, even in cases when the entity has more than one accounting basis. After you enter the local expected credit loss amount, the panel uses the current local-to-base exchange rate to calculate the base allowance amount for ECL transactions where the security is foreign denominated. Eagle Accounting can differentiate between increasing expected credit lossses for a dummy asset and decreasing expected credit losses for a dummy asset, and accounts for them differently to properly capture variations in FX rate. For more information, see Collective/Group-Level ECL Examples for US GAAP.
Process ECL Transactions at the Collective/Group Level for US GAAP
To process collective/group-level ECL transactions:
In Accounting Center, in the left navigation pane, click Transactions > Adjustments > Expected Credit Loss Transactions > Book ECL Collective Level.
You see the Book ECL Collective Level panel. An example follows.In the Entity Information section, select the entity/basis for the transaction.
In the Issue Information section, specify the Trade Date and Accounting Date, and select the dummy asset ID used for collective/group-level accounting.
In the Expected Credit Loss Information section, enter the Local Loss Allowance value and the Local to Base FX Rate, if the security has a foreign denomination.
Complete the remaining options in the Book ECL Collective Level panel.
For more information about each option, see the following table.Click Submit.
Book ECL Collective Level Panel Example
An example of the Book ECL Collective Level panel follows.
Book ECL Collective Level Panel Options
The following are the options in the Book ECL Collective Level panel.
Option | Tag | Description |
|---|---|---|
Entity Information | Â | Â |
Entity ID | 1163 | Specifies the unique identifier of the entity. |
Entity Name | 1164 | Specifies the name of the entity. |
Accounting Basis | 21 | Specifies the accounting basis for the selected entity to process. You can select an accounting basis of IFRS. NOTE: Collective/group-level ECL transactions are basic-specific events. These transactions/events process only on the accounting basis you specify in the panel, even in cases when the entity has more than one accounting basis. |
Base Currency | 86 | Displays the base currency of the entity. |
Regulatory Category | 12387 | Displays the regulatory category associated with International Financial Reporting Standards (IFRS) for the selected entity/accounting basis grouping. You can process collective/group-level ECL for a GAAP accounting basis only when the regulatory category is Held to Maturity (HTM). |
Issue Information | Â | Â |
Trade Date | 35 | Specifies the effective date to use for processing. The ECL effective date must be equal to the accounting date. |
Accounting Date | 36 | Specifies the accounting date for the entity to use for processing. The accounting date must be open. |
Monthly Accounting Date | 4733 | Displays the month end accounting date for the entity. For example, this date occurs in January. |
Event Type | 55 | Displays the business intent of the transaction. Shows a value of ADD_ECL_GROUP. |
Cross Reference Type | 1234 | Specifies the cross reference type associated with the security. |
Cross Reference ID | 1233 | Specifies the cross reference identifier associated with the security. |
Issue Name | 961 | Specifies the name of the security. |
Asset Currency | 85 | Displays the local currency of the security. |
Expected Credit Loss Information | Â | Â |
Local Loss Allowance | 16990 | Specifies the value of the local Expected Credit Loss allowance. This is the local expected credit loss amount. |
Local to Base FX Rate | 87 | Specifies the foreign exchange rate used to calculate the Base Loss Allowance. This is the local to base exchange rate. You can specify a value only if you select a foreign denominated security. Otherwise, the field is locked. |
Base Loss Allowance | 16991 | Displays the base expected credit loss amount. The system uses the current local-to-base exchange rate to calculate the base allowance amount for ECL transactions where the security is foreign denominated. |
Expected Credit Loss Activity | Â | Â |
Prev ECL Local | 7350 | Displays the previous value for the Local Loss Allowance. When you update the current balance or stage, the system moves the current value to this previous field to store the prior value. |
Prev ECL Base | 7430 | Displays the previous value for the Base Loss Allowance. |
ECL Delta Local | 7351 | Displays the local ECL delta value. |
Local to Base FX Rate | 7961 | Displays the foreign exchange rate used to calculate the ECL Delta Base. This is the local to base exchange rate. |
ECL Delta Base | 7431 | Displays the value of the base ECL delta. The system uses the current local-to-base exchange rate to calculate the base delta amount for ECL transactions where the security is foreign denominated. |
Total ECL Base = Prev Base + Delta Base | 7432 | Displays the Total ECL Base value. This represents the previous value for the Base Loss Allowance plus the delta base. |
Other Information | Â | Â |
Trade Ticket Information | 761 | Contains the trade ticket identification number. |
Transaction Notes | 56 | Contains user defined information about the transaction. |
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