Expected Credit Loss

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Asnake E
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Joined: 02 Oct 2019, 03:28

Expected Credit Loss

Post by Asnake E »

Greetings,

I have one question on expected credit loss

Are entities required to perform assessment for expected credit losses on receivables that are not trade in nature. I mean they have no contractual terms of repayment when cash was advanced to the debtor.
JRSB
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Re: Expected Credit Loss

Post by JRSB »

Like informal intercompany loan? I believe the answer is not technically as there are no contractual cash flows so there are none to miss but in practice it makes sense to, plus the question of what the substance of the balance is, eg is it in substance capital.
Asnake E
Posts: 213
Joined: 02 Oct 2019, 03:28

Re: Expected Credit Loss

Post by Asnake E »

Thank you for the reply. So unless there is no contractual cash flows of the repayment, there is no need to assess the expected credit loss?
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Marek Muc
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Re: Expected Credit Loss

Post by Marek Muc »

No, if it's a financial asset and it's debt - you need to recognise ECL
Asnake E
Posts: 213
Joined: 02 Oct 2019, 03:28

Re: Expected Credit Loss

Post by Asnake E »

Thank you. Very helpful.
Leo
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Joined: 05 Apr 2020, 22:31

Re: Expected Credit Loss

Post by Leo »

Hi,

Just a quick question, what's the meaning of this, anyway it will be eliminated at the group level?

THanks
JRSB
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Re: Expected Credit Loss

Post by JRSB »

But in separate financial statements?
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