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Expected Credit Loss Tool for receivables under IFRS 9, General Approach

Our ECL Tool for receivables under IFRS 9 – General Approach is designed to help financial institutions and businesses accurately calculate expected credit losses with ease and compliance. Built with flexibility and transparency in mind, the tool supports stage classification, probability of default (PD), loss given default (LGD), and exposure at default (EAD) calculations. It calculates automatically the expected credit loss (ECL) of the instrument given the exposure stage. It enables users to meet IFRS 9 requirements efficiently while gaining deeper insights into credit risk and exposure health.

The tool streamlines ECL estimation through a detailed yet materially automated process. It offers a straightforward way to calculate ECL, leveraging your inputs with pre-prepared models and data from CFO.tools:

User-provided inputs include data about the borrower (e.g. credit rating) and the instrument (e.g. amounts, repayment schedule, interest rate). Our team can support you with additional analyses if some information is not available (e.g. credit rating data).
Based on the input data, CFO.tools’ statistical and macroeconomic models will automatically assess the 12-month or lifetime Probability of Default (PD) for each instrument at the required date. The statistical models rely on detailed historical data about PD over time, transitions between different ratings, macroeconomic data, forecasts and adjustments, and other market information.
The tool automatically estimates Loss Given Default (LGD) based on the collateral details you provide, while manual adjustments are also possible.
With these analyses complete, ECL is automatically calculated to determine the instrument’s impairment for the period.

The methodology and the approach of the tool have been consulted with IFRS experts from a leading audit firm.

Advantages:

Fast and easy-to-use
Automated data input for key ECL components (PD, LGD)
Automatic forward-looking macroeconomic and scenario adjustments to point-in-time PD
Market-based estimates for PD and LGD, updated regularly

Robust risk scenario testing
Multi-period analyses with a single data entry
Re-use of data across different tools and purposes, including transfer pricing analyses
Support and help available thought the process

Are you ready to harness the power of this tool and streamline your financial processes, ensuring compliance and driving better, more informed business decisions?

Expected Credit Loss Tool for receivables under IFRS 9, General Approach

The tool streamlines ECL estimation through a detailed yet materially automated process. It offers a straightforward way to calculate ECL, leveraging your inputs with pre-prepared models and data from CFO.tools:

Advantages:

Are you ready to harness the power of this tool and streamline your financial processes, ensuring compliance and driving better, more informed business decisions?

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