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Assessment of Expected Credit Loss

The International Accounting Standards Board (IASB) has devoted considerable effort to resolving issues that dramatically emerged during the financial crisis – particularly the delayed recognition of credit losses on loans. As many believed that the incurred loss model in IAS 39 contributed to this delay, the IASB has introduced a forward-looking expected credit loss model under the Impairment Aspect of the IFRS 9 standard, and how banks should now calculate credit losses to comply with the new IFRS 9 (Equivalent to IND AS 109 in India).

The IASB published the IFRS 9 Financial Instruments in July 2014, completing its response to the financial crisis by improving the accounting and reporting of financial assets and liabilities.

RBSA’s customized models and solutions can be used by our clients for both estimation and reporting of Expected Credit Losses, in accordance with the IASB guidelines.

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