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A financial asset is expected credit impaired if the expected credit risk has increased significantly from initial recognition.In that case interest will be calculated on nbv ( cv-impairment) of financial asset.
If the expected credit risk has not increased significantly then financial asset is not credit impaired and the interest will be calculated on the gross value of financial asset.
Is the above understanding of mine correct? Quite confused!
Thanks
One more question..
Is the loss allowance shown as a separate element in balance sheet or netted off against carrying value of financial assetThanks again
@rihaam said:
A financial asset is expected credit impaired if the expected credit risk has increased significantly from initial recognition.In that case interest will be calculated on nbv ( cv-impairment) of financial asset.If the expected credit risk has not increased significantly then financial asset is not credit impaired and the interest will be calculated on the gross value of financial asset.
Is the above understanding of mine correct? Quite confused!
Thanks
Hi,
Yes, this sounds correct.
Thanks
@rihaam said:
One more question..
Is the loss allowance shown as a separate element in balance sheet or netted off against carrying value of financial assetThanks again
Hi,
It would be netted off and disclosed within the notes.
Thanks
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