ECL: How to Measure Probability of Default
Expected credit loss challenges many experienced accountants and finance people, because it contains the element of uncertainty and some sort of guessing or estimating what can happen in the future. That’s why it is “expected” after all. I wrote a few articles about the process…
How to account for financial guarantees under IFRS 9?
What is a financial guarantee? What is it NOT? And, how to account for financial guarantees under IFRS 9? Learn here!
How to account for contracts to buy commodities with future delivery (own use)?
When you purchase a commodity with future delivery for fixed price, should you account for it as for derivative under IFRS 9? Or as a purchase of inventories (“own-use” contract)? Find out here with example included.
Can we classify loans with variable interest at amortized cost?
Variable interest with cap/floor, full recourse, inflation-linked interest, collaterals – can you still classify these loans as at amortized cost?
Measuring expected credit loss: Loss rate vs. Probability of default
Some time ago I published an article about calculating bad debt provision in line with IFRS 9. Precisely speaking, it was about measuring expected credit loss using simplified approach for trade receivables – just to be on the safe side. Since then, I keep receiving…
Example: Expected Credit Loss on Interest-free On-demand Loan
Let’s face the truth: most intercompany loans (or at least many of them) are special in some way: They are undocumented – a parent simply sends cash to a subsidiary with no contract whatsoever and no one has an idea what the terms of the…
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