MILES / Financial Reporting Valuation
Expected Credit Loss (ECL) Assessment
Support credit loss estimates with relevant data, assumptions and explanations.
Discuss Expected Credit Loss (ECL) Assessment
An ECL assessment needs to connect the financial exposure with evidence about recoverability and credit risk. Historical collection experience and forward-looking information both need to be considered in the context of the relevant portfolio.
MILES supports management’s ECL assessments under HKFRS 9 / IFRS 9, helping analyse relevant financial assets, organise credit information and document the methods and assumptions used.
When should you speak with us?
- You are preparing reporting-date assessments for receivables, loans or other relevant exposures.
- Collection patterns, counterparty circumstances or economic conditions have changed.
- Your auditors require further support for loss assumptions, forecasts or model inputs.
How we help
Define the exposures
Agree the financial assets and other exposures in scope and understand the assessment approach established with the finance team.
Review credit information
Analyse ageing, collections, defaults, counterparty information and security or recovery arrangements relevant to the exposure.
Develop the assessment
Apply an approach suited to the portfolio and available data, considering historical experience and relevant forward-looking information.
Document and explain
Provide supporting calculations and explanations of assumptions, data limitations and changes, with auditor query support within scope.
What information is typically required?
- Exposure schedules, receivable ageing and contractual terms
- Historical collections, defaults, write-offs and recoveries
- Counterparty financial information and credit assessments
- Collateral, guarantees, forecasts and previous ECL calculations
The information request will be tailored to the purpose and scope. If your records are incomplete, we can first discuss preparation priorities.
Frequently asked questions
Does an amount have to be overdue before it is assessed?
Overdue status is only one piece of credit information. The assessment should consider the nature of the exposure, relevant evidence and applicable accounting requirements.
Can the same loss percentage be used for all balances?
A single rate may not reflect differences in credit risk and collection patterns. Segmentation and assumptions should be supported by the portfolio’s characteristics and available evidence.
Accounting standard: IFRS 9
Plan your expected credit loss (ecl) assessment work
Share your objectives, the assets or businesses involved, available information and expected timetable. We will discuss the scope, preparation priorities and next steps with you.
Enquire About Expected Credit Loss (ECL) Assessment