Single Rulebook Q&A

How should the amount referred to in Article 473a(4) be calculated:

a) The difference between the Expected Credit Losses (ECL) at reporting date for loans that are not credit impaired and the ECL at implementation date for all the loans that are not credit impaired at the implementation date, or;

b) The ECL at reporting date for loans that are not credit impaired minus the ECL at implementation date for those same loans?

The second part of the value to be added to CET1 according to Article 473a(4), should be the value of expected credit loss for loans that are not credit impaired at reporting date minus the value of expected loss for loans that are not credit impaired at the transition date.

Two possible interpretations as described in the question above are therefore put forward for calculating this difference.

The amounts referred to in Article 473a(3)(a) and (b) of CRR are total amounts of expected credit losses, i.e. no exposure-by-exposure assessment shall be performed.

The total amounts of Stage 1 and Stage 2 Expected Credit Losses (ECL) at the reporting date, i.e. for all exposures not credit impaired at the reporting date, and the total amounts of Stage 1 and Stage 2 ECL at the date of initial application of IFRS 9, i.e. for all exposures not credit impaired at the date of initial application, shall be relevant for the calculation.