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What is the difference between 12 months expected credit losses and lifetime expected credit losses?
Are the calculations the same? I am confused about the 12 months expected credit losses
For the lifetime expected credit losses, is the calculation is the present value of cash shortfalls multiply by the probability of default?
What about the 12 months expected credit losses?
The same except:
Lifetime – probability of default at any time in the life of the loan
12 month- probability of default at any time in the next 12 months
Can you provide an example for the calculation of 12 months expected credit losses?
In all the past papers that I have done so far, only requires us to calculate the lifetime expected credit losses
Does that mean the 12 months expected credit losses will be given most of the time?
I think I just understood what you said
Is it the difference between 12 months expected credit losses and lifetime expected credit losses is due to the “percentage used for the probability of default” ?
Did I understand that correctly?
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