IFRS 9 – Expected Credit Loss (ECL) Modelling

IFRS 9 – Expected Credit Loss (ECL) Modelling provides a practical and technical understanding of the impairment requirements under IFRS 9 Financial Instruments, with a specific focus on the Expected Credit Loss (ECL) model.

The transition from the incurred loss model under IAS 39 to the forward-looking ECL model has significantly changed how entities recognise and measure credit losses. Organisations must now incorporate probability of default, loss given default, exposure at default and forward-looking macroeconomic information into their impairment calculations. This has major implications for financial institutions, corporates, credit providers and public sector entities.

This course equips participants with the technical knowledge and practical tools required to design, interpret and evaluate ECL models in compliance with IFRS 9. It addresses staging assessments, significant increase in credit risk (SICR), macroeconomic overlays, disclosures and governance considerations to ensure accurate, defensible and audit-ready impairment calculations.

TARGET COMPETENCIES

This IFRS Training comprehensive course will enable participants to appreciate and understand the following target competencies:

• Understand the impairment requirements of IFRS 9

• Differentiate between the incurred loss and ECL models

• Apply the three-stage impairment approach

• Determine significant increase in credit risk (SICR)

• Calculate 12-month and lifetime expected credit losses

• Understand PD, LGD and EAD components

• Incorporate forward-looking macroeconomic information

• Assess model governance and documentation requirements

• Interpret IFRS 7 disclosure requirements for ECL

WHO SHOULD ATTEND?

This specialised course will benefit professionals involved in financial reporting, credit risk, modelling and financial instrument accounting.

• Accounting Professionals

• Chief Financial Officers

• Finance Directors

• Risk Managers

• Credit Risk Analysts

• Treasury Professionals

• Internal Auditors

• External Auditors

• Banking and Financial Services Professionals

• Financial Analysts

Organisations consider this course an essential training opportunity for finance and risk teams responsible for IFRS 9 compliance and impairment modelling.

COURSE OUTLINE

Introduction to IFRS 9 Impairment

• Overview of IFRS 9 Financial Instruments

• From IAS 39 incurred loss to IFRS 9 ECL model

• Scope of financial assets subject to impairment

The Three-Stage ECL Model

• Stage 1: 12-month expected credit losses

• Stage 2: Lifetime expected credit losses

• Stage 3: Credit-impaired assets

• Movement between stages

Significant Increase in Credit Risk (SICR)

• Quantitative and qualitative indicators

• Rebuttable presumption of 30 days past due

• Low credit risk simplification

ECL Model Components

• Probability of Default (PD)

• Loss Given Default (LGD)

• Exposure at Default (EAD)

• Discounting and effective interest rate

Forward-Looking Information

• Macroeconomic variables

• Scenario analysis and probability weighting

• Management overlays

Simplified Approach

• Trade receivables

• Contract assets

• Provision matrices

Disclosures and Governance

• IFRS 7 disclosure requirements

• Model validation and documentation

• Internal controls and audit considerations

VENUE

Choice between In-house / External Venue / Live Online Classroom

Do you have more people interested in attending this course? Would you like to tailor it to meet your company’s exact requirements? We can deliver this course at your organisation’s premises, reducing costs and increasing ROI.

If you require a fully customised solution, our learning specialists will guide you from consultation to implementation and evaluation to ensure maximum value from your training investment.