IFRS 9Chapter 9Lesson 4
The simplified approach and the provision matrix
Step 1 of 7Learning objectives
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For trade receivables and contract assets without a significant financing component, the loss allowance always equals the lifetime loss, without stages; the provision matrix applies a loss rate per ageing bucket.
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Learning objectives
- Say which assets must use the simplified approach and which offer a choice.
- Build a provision matrix by ageing bucket and deduce the loss allowance.
- Establish a loss rate from history and a forward-looking adjustment.
- Record the charge for the period and place the case of lease receivables.