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Highlights:

- - Support of specific approaches depending on the deterioration of credit quality and significance of a financial asset
  - Separate workbench to cope with requirements of probability-weighted approaches and individual recovery-based approaches
  - Risk provision traceable to individual deal level including calculation details and underlying data
  - Consideration of scenarios
  - Simulation before journalisation

Risk provision is an important topic in all GAAPs.

Nonetheless each GAAP answers the following questions in a different way:

At which point in time should a risk be considered in the balance sheet and income statement?
How much provision should be considered?

FlexFinance provides the following components as instruments for the configuration, simulation and consideration of risk provisions in financial statements:

For GAAP-specific usage, please refer to the specific sections. For IFRS 9 please refer to IFRS 9 Blueprint Impairment.

The result of the risk provision process in FlexFinance are

Debit/credit entries and
Data marts

These data marts support detailled analyses, for example:

FlexFinance > Workbenches for risk provisioning > risk provision1.png

Figure: Transfers between impairment stages (gross basis presentation)

Figure: Movements in allowances and provisions for credit losses