After being assigned to a specific segment and after being assigned to a specific impairment stage, a Impairment stage 3 is related to the objective evidence of impairment.
After minimum one individual financial asset has been assigned to impairment stage 3, the solution supports the impairment of customers.
In a first step a significance test is applied for such deals impaired in stage 3.
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In both cases, the risk provision is calculated at on individual deal level on the basis of the . The basis of calculation is the comparison of the Gross Carrying Amount (GCA) and the recoverable amount, but for
- Significant deals, the recoverable amount is derived on the basis of individual deal specific recovery cash flows.
Expected credit losses are posted as Specific Provision. - Non-significant deals, the recoverable amount is derived on the basis of a loss that is calculated using statistical methods applied to historic performance information on the portfolio to which the individual deal belongs.
Expected credit losses for non-significant financial assets are posted as Lump Sum Specific Provision.
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