Expected credit loss: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson (Link with Discount Factor page.) |
imported>Doug Williamson (Add link.) |
||
| (3 intermediate revisions by the same user not shown) | |||
| Line 1: | Line 1: | ||
''Financial reporting - impairment of financial assets - IFRS 9'' | ''Financial reporting - impairment of financial assets - IFRS 9''. | ||
(ECL). | (ECL). | ||
| Line 24: | Line 24: | ||
==See also== | ==See also== | ||
* [[Credit ]] | |||
*[[Default]] | *[[Default]] | ||
*[[Discount | *[[Discount factor]] | ||
*[[Exposure At Default]] | *[[Exposure At Default]] | ||
*[[Financial asset]] | *[[Financial asset]] | ||
| Line 32: | Line 33: | ||
*[[Loss Given Default]] | *[[Loss Given Default]] | ||
*[[Probability of Default]] | *[[Probability of Default]] | ||
[[Category:Accounting,_tax_and_regulation]] | |||
[[Category:Compliance_and_audit]] | |||
Latest revision as of 12:25, 6 July 2022
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
