ifrs9-ecl
Installation
SKILL.md
CORE PRINCIPLE
ECL is FORWARD-LOOKING and PROBABILITY-WEIGHTED. It is NOT the incurred loss. It is the probability-weighted expectation of credit losses given ALL reasonable and supportable information, including future economic conditions. Never wait for objective evidence of impairment to recognise a loss.
STAGE SUMMARY
| Stage | Trigger | ECL Horizon | Interest Income |
|---|---|---|---|
| Stage 1 | No SICR since origination | 12-month ECL | On GROSS carrying amount |
| Stage 2 | SICR since origination — see ifrs9-staging.md | Lifetime ECL | On GROSS carrying amount |
| Stage 3 | Credit impairment occurred | Lifetime ECL | On NET carrying amount (gross - ECL) |
CRITICAL: Stage 3 interest is on the NET amount. Recognising Stage 3 interest on the gross amount is a material accounting error.