Answer to Question #308770 in Accounting for Tee

Question

What would be the treatment of IFRS 9 on receivables considering a company that core operation is granting loans to customers.

Answer 1

The treatment of IFRS 9 on receivables for a company whose core operation is granting loans to customers is to measure their impairment using the expected credit loss model. With the concept of expected credit losses, companies are required to look at how current and future economic conditions impact the amount of loss. The company is required to account for what it expects the loss to be on the day they raise the invoice, and revise their estimate of that loss until the day they get paid.