Past due
Past-due information is one indicator in assessing credit risk and impairment under IFRS 9. A significant increase in credit risk may occur before a payment is overdue; the general approach uses reasonable and supportable forward-looking information, together with applicable rebuttable presumptions. The applicable expected-credit-loss approach depends on the instrument. Being past due is not necessarily the same as default or credit impairment.
Worked example
An instalment due on 30 June remains unpaid on 10 July. The payment is past due; the lender considers this fact alongside other information when assessing the receivable’s credit risk.
Common mistake
Assuming a loan can never have a significant increase in credit risk until a payment is overdue, or treating all past-due assets as automatically uncollectible.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Supporting | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |