IFRS 9 Impairment | Current Expected Credit Loss Model | General Model | ACCA Exam | IFRS Lectures

In this video, I explain the current expected credit loss model. Current Expected Credit Losses (CECL) is a credit loss accounting standard (model) that was issued by the Financial Accounting Standards Board (FASB) on June 16, 2016. Under the new current expected credit loss model, financial institutions will be required to use historical information, current conditions and reasonable forecasts. Farhat Accounting Lectures can help you understand current expected credit loss model.
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The new IFRS 9 impairment model requires impairment allowances for all exposures from the time a loan is originated, based on the deterioration of credit risk since initial recognition. If the credit risk has not increased significantly (Stage 1), IFRS 9 requires allowances based on 12 month expected losses.

[@vaibhavsharma2749]

I can't believe it can be this good

[@thetaxplanet6249]

Thanks Sir for such a wonderful video. This topic was confusing but you have cleared all my doubts. I am happy to share that I have successfully completed DIP IFRS - ACCA Uk with 73 marks. Special thanks to you

[@AccountingLectures]

You are very welcome! Please take a look at my website for more resources: www.farhatlectures.com

[@nikkaxyzaobenario7565]

Sir why does loss allowance for FVOCI Debt instruments recognized in OCI and not as a valuation account?

[@ahmedalaa-zv7tx]

so helpful appreciate your effort

[@AccountingLectures]

You are most welcome. Please subscribe and share. If you want to access more resources, check my website: ✔farhatlectures.com/courses ✔Instagram: @farhatlectures ✔ Linkedin: www.linkedin.com/in/professorfarhat/ ✔Facebook:@accountinglectures ✔Twitter: @farhatlectures ✔Reddit: U/farhatectures 🎤Email: [e-mail]

[@AR-cn4nq]

Very well explained sir. Really appreciate it. I would like to see more lecture on IFRS 9 and CECL how they work.

[@AccountingLectures]

Most welcome. Here's my international accounting course: farhatlectures.pathwright.com/library/international-accounting-ifrs/about/

[@-afandiyevc5183]

hi i would like ask: in bpp book when calculating expected loss they multiplies default rate to the amount of loss that would result from default. but in some examples they multiply to gross amount. for example if i have 100k receivable and they have colletral amount of 70k. to calculate expected losses i have to multiply to 30k or 100k?

[@matienman1]

Dr. Farhat, first of all I thank you so much for your interesting lectures!!! I am a little bit confused. Now the 2020 changes in CPA FAR exam only about IFRS or including US GAAP ( goodwill impairment test, financial instruments losses, etc). Now is CECL in the lecture applies to US GAAP as well? because I remember in US GAAP debt securities AFS and HTM are only impaired if non temporary impairment exists. But never bad debt expense. Please clarify it to me and appreciate your efforts and lovely lectures

[@angapydiraju7557]

Ur awesome sir..thanks a lot

[@AccountingLectures]

You are most welcome. Please subscribe and share. If you want to access more resources, check my website: farhatlectures.pathwright.com/library/ Connect with me: Instagram Account: instagram.com/farhatlectures/ Linkedin: www.linkedin.com/in/professorfarhat/ Facebook: facebook.com/accountinglectures Twitter: twitter.com/farhatlectures Email: [e-mail]

[@FooserX]

Is this just for impairment? Could this provision matrix be used to estimate normal AR with aging buckets? Wouldn't this model just start with one month? How does this work when you have a company with thousands of invoices each month. Would you need to perform one of these models each month of the year, and then average those %'s in each bucket? And going forward, you apply those rates to monthly aging buckets?

[@190sunny]

Superb ! Explained very nicely. Looking forward for more videos.

[@AccountingLectures]

You are most welcome. Please subscribe and share. If you want to access more resources, check my website: ✔farhatlectures.com/ ✔Instagram: @farhatlectures ✔ Linkedin: www.linkedin.com/in/professorfarhat/ ✔Facebook:@accountinglectures ✔Twitter: @farhatlectures 🎤Email: [e-mail]

[@nikkaxyzaobenario7565]

Sir if I have an accrued interest (receivable) before the impairment of the asset happens, does it affect my loss allowance?

[@sampathekanayake8998]

Can someone help me understand how cure rate is linked to ECL? Cure rate is the % of defaulted loans catches up all defaulted payments and change to "Perform" status?

[@kapilgoel9938]

Is % are defined in ifrs uto what %age ig should be classified in which category out of 3

[@loersherosei-donkor249]

great.....👍

[@AccountingLectures]

Thank you! Cheers! Here's my international accounting course: farhatlectures.pathwright.com/library/international-accounting-ifrs/about/

[@shahriyarmalikov588]

Hi Farhad, how to calculate PD and LGD? Can you explain it in detail? Should i use of debtor aging? Thanks !!!

[@shamailajaved8027]

well explained.. could you also help me understand the simplified approach as well

[@ahmadalsouqi7572]

I dont understand, are we applying the 3 stages for the same loan? If yes why are we multiplying the percetntage on the same amount? I mean they should have collected some of the loan amount so they should compute on the remaining balance! And the percentage itself is not clear! This is the first time i feel that farhat missed to explain something 😞

[@ankitgupta-sn3ug]

Do you also provide training in IFRS9 Credit risk modelling for Credit card Product... PD/LEG/EAD components.... If possible please help.

[@AkhonaNgquba]

Brilliant 👏 👏 👏. I am a qualified Chatered Accountant and think that this is the best video I have watched on IFRS 9. It does mot need to be complicated at all (except the calculations of course) and you kept it simple.

[@AccountingLectures]

Glad it was helpful! Please take a look at my website for additional resources: farhatlectures.com/

[@umeshaswani9950]

Fantastic

[@AccountingLectures]

Most welcome. Www.farhatlectures.com

[@dhanukamaduranga8507]

Can anyone explain how to present the ecl provision for fvoci investments in balance sheet ??

[@johncarlosguiao6011]

Hi Sir Farhat. Nice video. But I have 1 question regarding the discussion in the video. Can you elaborate more on why equity securities do not consider ECL? Thank you!

[@ahmadalsouqi7572]

Because they dont have maturity and you are not waintin cashflows from them, its either you receive dividend or not

[@AnbenK]

nice

[@AccountingLectures]

You are most welcome. Please subscribe and share. If you want to access more resources, check my website: farhatlectures.com/ Connect with me: Instagram Account: instagram.com/farhatlectures/ Linkedin: www.linkedin.com/in/professorfarhat/ Facebook: facebook.com/accountinglectures Twitter: twitter.com/farhatlectures Email: [e-mail]

[@Neha_Siddiqui_]

plz upload on single model of IFRS 9, thanx :)

[@AccountingLectures]

I will do so in the relative near future. You are welcome. Please subscribe and share the channel on social media. Please connect with me: Instagram: instagram.com/farhatlectures/ LinkedIn: www.linkedin.com/in/professorfarhat/ Facebook: facebook.com/accountinglectures