IAS39 differentiates two stages:
- Incurred but not reported losses (IBNR)
- Objective evidence of impairment
For IBNR it covers the calculation of risk provision based on portfolios. For each portfolio the specific Probability of Default and Loss Given Default can be
- calculated based on historic default information or it can be
- delivered from any source.
It covers the calculation of risk provision based on portfolios. For each portfolio the specific Probability of Default and Loss Given Default can be calculated based on historic default information or it can be delivered from any source. The combination of both, the loss-rate, will be applied to the Gross Carrying Amount.
For the customer specific consideration of objective evidence in the specific provisioning process two options are provided:
Recovery Cash flows can be
- imported from any source or
- captured in the Customer Impairment Workbench.
For the customer specific consideration of objective evidence also to options are provided: Recovery Cash flows can be imported from any source or captured in the Customer Impairment Workbench.