IFRS 9Chapter 9Lesson 1
Impairment: expected credit losses and three stages
Step 1 of 6Learning objectives
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A loss allowance for expected credit losses is recognised from inception: at 12 months as long as credit risk has not increased significantly, over the lifetime afterwards, and for credit-impaired assets.
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Learning objectives
- Define credit loss, expected credit loss, 12-month loss and credit-impaired asset.
- Place an instrument in stage 1, 2 or 3 and deduce the loss allowance.
- Assess a significant increase in credit risk by comparing default risks.
- Record the charge to the loss allowance on a change of stage.