Exposure At Default and Exposure Draft: Difference between pages

Latest revision as of 10:39, 9 October 2013

(ED).

A proposal for a new or revised Accounting standard or other accounting accounting guidance, issued in draft form for consultation and comment.

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-''Credit risk evaluation - banking''
+(ED).
-(EAD).
+A proposal for a new or revised Accounting standard or other accounting accounting guidance, issued in draft form for consultation and comment.
-Exposure At Default is an amount expected to be outstanding following a default by a counterparty, taking account of:
-*Any credit risk mitigation;
-*Drawn balances; and
-*Any undrawn amounts of commitments and contingent exposures.
+== See also ==
+* [[Accounting standards]]
+* [[ED]]
+* [[Statement of recommended practice]]
-=====EAD for derivative contracts=====
+[[Category:Accounting,_tax_and_regulation]]
-The EAD for a derivatives contract has two components:
-*The current fair market value or replacement cost (RC); and
-*The possible future increase in the market value over the remaining life of the contract.
-This possible future increase is known as the Potential Future Exposure (PFE).
-Considering both elements of the EAD together:
-EAD = RC + PFE
-==See also==
-*[[Default]]
-*[[Expected Loss]]
-*[[Loss Given Default]]
-*[[Potential Future Exposure]]
-*[[Probability of Default]]
-*[[Replacement Cost]]