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professor can we say that assets whose credit risks have increased significantly are credit impaired???
and also assets which are credit impaired, we use LIFETIME expected credit losses?
Dear tutor i have a doubt related to Jiya024’s question. The method to calculate the expected credit losses remains the same, whether the asset is credit impaired or credit risk has increased significantly/is still low. In all 3 conditions same way of calculating credit loss, as the PV of difference between contractual cash flows and the cash flows entity expects to receive, true tutor?
If you are at Stage 2 or 3 – lifetime losses
Clue for Stage 2 is ‘credit risk has increased’