86. In accordance with paragraph 5.5.5 of IFRS 9, ’if, at the reporting date, the credit risk on a …

In accordance with paragraph 5.5.5 of IFRS 9, ’if, at the reporting date, the credit risk on a financial instrument has not increased significantly since initial recognition, an entity shall measure the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses’. Credit institutions should measure ECL for all lending exposures and a nil allowance should be rare because ECL estimates are a probability-weighted amount that should always reflect the possibility that a credit loss will occur (see paragraphs 5.5.17 and 5.5.18 of IFRS 9). A nil allowance could however occur, for example, for fully collateralised loans (although credit institutions should be cautious when developing estimates of collateral value, as valuation of collateral at origination may change over the life of the loan).

1. Forbhreathnú

1.1 Tagairtí

1.2 Ceanglais aitheanta

1.3 Caighdeáin ghaolmhara

2. Ceanglais aitheanta

3. Caighdeáin ghaolmhara

• EBA - Published by the European Banking Authority at https://www.eba.europa.eu/