IFRS 7Chapter 6Lesson 2
Credit risk (2): loss allowance reconciliation, maximum exposure and collateral
Step 1 of 7Learning objectives
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The reconciliation explains the change in the loss allowance from opening to closing; maximum exposure is given before collateral, which is described separately.
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Learning objectives
- Explain the loss allowance reconciliation and calculate the closing balance from the opening balance and movements.
- Record the charge and then the write-off charged to the loss allowance.
- State that maximum exposure is given before deducting collateral and calculate the remaining exposure with a cap.