102. IFRS 9, paragraph B5.5.2, states that lifetime expected credit losses are generally expected …

IFRS 9, paragraph B5.5.2, states that lifetime expected credit losses are generally expected to be recognised before a financial instrument becomes past due and that ‘typically, credit risk increases significantly before a financial instrument becomes past due or other lagging borrower-specific factors (for example a modification or restructuring) are observed’. Therefore, credit institutions’ analyses should take into account the fact that the determinants of credit losses very often begin to deteriorate a considerable time (months or, in some cases, years) before any objective evidence of delinquency appears in the lending exposures affected. Credit institutions should be mindful that delinquency data are generally backward-looking, and will seldom on their own be appropriate in the implementation of an ECL approach. For example, within retail portfolios adverse developments in macroeconomic factors and borrower attributes will generally lead to an increase in the level of credit risk long before this manifests itself in lagging information such as delinquency.

1. Forbhreathnú

1.1 Tagairtí

1.2 Ceanglais aitheanta

1.3 Caighdeáin ghaolmhara

2. Ceanglais aitheanta

3. Caighdeáin ghaolmhara

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