CERTYNEX IFRS ACADEMY

Tanit Banque SA has granted loans for a total of 2,000,000, secured by mortgages worth 1,500,000 (case facts). What amount does it present as the maximum exposure to credit risk, under the IFRS 7 rule?

2,000,000, the maximum exposure being stated before deducting the collateral held, which is described separately.

500,000, being the net exposure after deducting the mortgages, which the bank adopts as the maximum exposure to credit risk.

1,500,000, being the value of the collateral, which measures the share of credit risk the bank has actually covered.

An amount chosen by management between 500,000 and 2,000,000, depending on the confidence it places in the value of the mortgages held.