This module will not be further enhanced. Support is limited to defect fixing only.

Introduction to IFRS9 Impairment

The IFRS9 Impairment module covers the calculation of the ECL (Expected Credit Loss) under the IFRS9 regulations for loans, overdrafts, letters of credit and bank guarantees using the PD (Probability of Default), LGD (Loss Given Default) and CCF (Credit Conversion Factor) based on the product, segment, and risk rating.

This functionality allows the user to classify the credit facilities, including loans and overdrafts, non-fund based facilities, bank guarantees, and letters of credit as per the IFRS (International Financial Reporting Standards) regulations. Also, the ECL (Expected Credit Loss) is calculated based on specific criteria.

The LKIFRS.PARAMETER application is created to allow the user to specify the criteria applicable for the IFRS classification.

The LKIFRS.STAGING.CRITERIA application is created to allow the user to specify the criteria value and the corresponding stage applicable for the IFRS classification.

The LKIFRS.PDLGD.DETAILS application is created to allow the user to capture the PD (Probability of Default) or LGD (Loss Given Default) values as uploaded by the bank.

The LETTER.OF.CREDIT,LKIFRS.INPUT and MD.DEAL,LKIFRS.INPUT versions are created to allow the user to capture the risk factors for letters of credit and miscellaneous deals.

The user is able to upload the PD, LGD or CCF values through a file.

This functionality allows the user to:

• Assign PD values to contracts for the ECL calculation.
• Classify the contracts with the required stages.
• Segment the customers for the ECL computation.
• Calculate the EAD for contracts.
• Assign LGD values to contracts for the ECL calculation.
• Assign CCF to contracts.

Click here to understand the terms and abbreviations used in this module.