CERTYNEX IFRS ACADEMY

Quartz SA holds a loan granted to a customer. At the reporting date, the credit risk has increased significantly since initial recognition, without the loan being credit-impaired. What loss allowance does Quartz recognise?

An allowance equal to the lifetime expected credit losses.

An allowance equal to the 12-month expected credit losses.

An allowance based on losses incurred, at the date the loan becomes credit-impaired.

The lifetime expected losses, provided the debtor's internal rating has fallen.