Multibagger stock ideas- Economic Credit approach

Discussion in 'Stock Advisory Services' started by Niveza India Pvt Ltd., Sep 6, 2016.

  1. Niveza India Pvt Ltd.

    Niveza India Pvt Ltd. Member

    Mar 14, 2016
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    #Multibagger stock ideas- Economic Credit approach

    #Nivezareview : The existing method of provisioning for credit impairment uses an ‘incurred loss’ model, which does not recognize credit loss until the loss has either occurred (IASB) or breached a probable threshold (FASB). The drawback has been recognized during the financial crisis and regulators across the globe could perceive the need to bridge the gap between credit loss incurred and loss provided for in financial statements. To tide over, IASB and FASB started working together on new credit impairment guidelines, but the collaboration ended in 2012. Now, the two organizations have their respective guidelines on expected credit loss. While both lay stress on ECL, each suggests a different methodology for calculating it.