ECL Calculator - ECL Calculator

COMPLEXITY MADE SIMPLE

Background and Solution

IFRS 9 requires impairments for Trade Receivables to be calculated on an expected credit loss basis (ECL). The calculation of ECL must have the following attributes :

  • Probability-weighted,so not biased towards worst or best case scenarios
  • Incorporate the effect of time value of money, and
  • Make use of reliable information including the use of historical, current and forward-looking Information

For most companies this will require a significantly different approach to impairment calculation and may require some new skills to apply competently.

   How does it work?

Once activated, the ECL.Calculator will ask you to upload certain of your historical customer data, e.g. monthly debtors aged analysis , write-offs experienced , recoveries achieved etc. .That’s it, the ECL.Calculator does all the rest!

The Output

The ECL computation is delivered to you in a report which includes the information an entity is required to provide in its financial statements.The report will also include appendices that will include information which your auditor will require to audit the outcome such as a summary of:

  • The method applied to develop the provisions matrix
  • The key inputs utilized
  • User data uploaded, and
  • The outcomes of regression analysis utilized to adjust for forward-looking Information.

 

ECL.Calculator Process

How does the ECL.Calculator work?

Find out more about the product from one of our leading IFRS9 experts

Prices are per portfolio report for each year end. Note that you can revise your portfolio but can only produce one final report per fee.

FAQs

Can I use it

The ECL.Calculator assists companies in calculating their IFRS 9 impairment model where they are required or have elected to use the simplified matrix approach for their trade receivables, contract assets and lease receivables. The calculator does not use the 3 stage general model approach.

Does the calculator use forward-looking information?

Yes.  The model incorporates forward-looking information such as your countries Gross Domestic Product, inflation, unemployment rates and interest rates to calculate the provision.

Which countries can use the ECL.Calculator?

The calculator works in numerous counties that are listed in the sign up page.  If you country is not listed, contact us and we will update the database to include your country’s relevant economic data.

 

What is the output?

The calculator produces a detailed report companies can use for their year end IFRS financial reporting. To view an example report, Click Here.

How does the ECL.Calculator calculate my IFRS 9 Impairment?

Companies need to use a matrix approach to calculating their impairments. To view the ECL.Calculator process, click on ‘How it works’ tab.

 

Can the auditors do this for me?

The above can be complex and time consuming for many entities who don’t have in-house experts. In addition, auditors cannot complete these calculations for their clients due to independence restrictions.

ABOUT W.CONSULTING

W.Consulting is an IFRS Advisory firm assisting clients globally with the implementation of IFRS and its application to specific transactions , adoption of standards and valuations required by IFRS. Our team of JSE-accredited IFRS Advisors operate across varied industries in over 20 countries

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Given the complexity of financial reporting standards and the strict independence requirements placed on auditors, we are ideally positioned to directly assist companies with their corporate reporting prerequisites.

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Our experienced team creates dynamic IT applications that combine learning and technology onto one platform. This integrated solution delivers improved efficiency in the rapid delivery of key information and knowledge.

Fueled by a passion for assisting clients in achieving high quality financial reporting, the following are the team behind the ECL.Calculator.

 

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