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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › FVOCI and expected credit losses
sir do you mind sparing an explanation as to why OCI is CREDITED with the amount equal to 12month expected credit losses, how can OCI be increased by expected credit losses? given that this is an unfavourable news, i can’t understand the rational for OCI being credited.
I do understand the double entry passed fro a deterioration of FV of financial asset Dr. OCI and Cr. Financial asset. but then the subsequent entry of Dr. SPL and Cr. OCI by an amount equal to expected credit losses is muddling, especially the Cr. in OCI. I understand the expense for SPL
I think it is saying that, if you have already Dr OCI Cr FA, when you should have Dr P&L Cr FA, you will have to Dr P&L Cr OCI. Is that what is on your mind?