2018

Nov 28 Mumbai

Expected Credit Losses under Ind AS

Training dates - November 28, 2018

Training location - Mumbai

Training fees - ₹20,000 + applicable taxes

 

Summary

 

Background

 

Banks, NBFCs and financial institutions have hitherto recognized non-performing assets (NPAs) on incurred loss basis. Basel and IASB have changed this basic framework to move to expected loss modelling framework where lenders are now expected to forecast losses that may happen in future months and years. This is a big leap in framework and brings with it enormous complexities both in terms of conceptual definitions and understanding as well as statistical data analytics and management judgement.

 

Under IAS 109, this new framework is applicable for the BFSI sector from 1 April 2018 onwards. Previous year 2017-18 is also required to be reported in the new format, hence effective date of transition is 1 April 2017.

 

Most banking professionals, who have not been involved in the project, are not aware of the implications of expected credit losses (ECL) and this programme seeks to bridge this gap.

 

This programme has been designed to help professionals who have not been exposed to ECL in their work function but are nevertheless required to know the subject. The programme is pitched at an introductory level and may not help those professionals who have already implemented ECL or are deep into an ECL project in their work sphere.

 

The programme will benefit

 

  • Senior management (BFSI segment) who are ultimately responsible for the ECL numbers that are reported in the financial statements
  • Accounting professionals who are expected to quantify ECL
  • Risk management professionals who are expected to closely work with accounting numbers in the new framework
  • Audit and compliance professionals who are required to verify whether these ECL numbers are true and fair
  • Equity and debt analysts whose clients may be BFSI players - to understand the impact on their financials and hence their borrowing capacity

Programme objectives and content

 

  • What is ECL
  • How is it measured for retail loan portfolio
  • What are EAD, LGD and PD and how are they quantified
  • What are the areas where management judgement is required and how could that be applied with being ad hoc
  • How are corporate loan ECLs measured
  • How are revolving loans ECL measured
  • Impact of macroeconomic factors on ECL
  • Impact of sectoral factors on the ECL
  • Impact of specific factors linked to heterogeneity of loans on the ECL
  • Practical caselets will be provided on which participants can work out the ECL based on loan performance
  • Differences between NPA measurement as per current practice will be demonstrated with the ECL framework
  • Participants will be encouraged to participate in workshop mode so that the understanding of ECL is disseminated at a practical level.