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  #1  
7th January 2016, 08:06 AM
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Ias ibnr

I want to get information about the IAS 39 Incurred but not reported (IBNR) as well as Portfolio Segmentation Requirements. So here can you provide me information about it?
  #2  
7th January 2016, 08:09 AM
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Join Date: May 2012
Re: Ias ibnr

I would like to tell you about the IAS 39 Incurred but not reported (IBNR) as well as Portfolio Segmentation Requirements as you want.

Here I am telling you about it as you want;

Under IAS 39, there are two types of provisions,
(a) Specific and
(b) Incurred but not reported (“IBNR”) i.e. collective provisions for earning loans.

The amount of the specific provision made in AIB Group’s consolidated financial statements is intended to cover the difference between the balance outstanding on impaired loans and estimated recoveries (i.e. the present value of future cash flows).


IBNR provisions can only be raised for incurred losses and will not be permitted for losses that are expected to happen as a result of likely future events.

IBNR provisions are determined by reference to loss experience in the portfolios and to the credit environment at balance sheet date.

A provision for loan losses is taken as a charge to income and added to the allowance for loan losses to bring the allowance to an appropriate level having regard to both specific and general factors.

Any subsequent charge off (write-off) is charged against the allowance.

All AIB divisions assess and approve their provisions and provision adequacy on a quarterly basis.

These provisions are in turn reviewed and approved by the AIB Group Credit Committee on a quarterly basis with ultimate Group levels being approved by the Group Board of Directors.

Portfolio Segmentation Requirements
1.Requirements set out in IAS 39-AG87

Grouping financial assets with similar credit risk characteristics, e.g. type of financial asset, industry, geographical location, collateral type, past-due status and other relevant factors

2.Relevance
Distinguish significant from not-significant loans
Calculate the loan loss allowance on a portfolio basis


Portfolio provisions for insignificant loans
IAS 39.64 1st sentence, 2nd alternative

Non-significant loans where trigger event has occurred

Related to loan portfolios

Calculation based on historical data permitted

Back testing required by IAS 39-AG89


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