Expected credit loss: Difference between revisions
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==See also== | ==See also== | ||
* [[Credit ]] | * [[Credit ]] | ||
*[[Credit loss]] | |||
*[[Default]] | *[[Default]] | ||
*[[Discount factor]] | *[[Discount factor]] | ||
Latest revision as of 22:18, 14 July 2024
Financial reporting - impairment of financial assets - IFRS 9.
(ECL).
Expected credit loss is a calculation of the present value of the amount expected to be lost on a financial asset, for financial reporting purposes.
It is calculated as:
ECL = PD x EAD x LGD x Discount Factor
Where:
ECL = expected credit loss
PD = probability of default
EAD = exposure at default
LGD = loss given default
Discount Factor is based on the expected date of default
