Illustrating the application of paragraph 35N
Entity A manufactures cars and provides financing to both dealers and end customers. Entity A discloses its dealer financing and customer financing as separate classes of financial instruments and applies the simplified approach to its trade receivables so that the loss allowance is always measured at an amount equal to lifetime expected credit losses. The following table illustrates the use of a provision matrix as a risk profile disclosure under the simplified approach:
20XX |
Trade receivables days past due |
||||
Dealer financing |
Current |
More than 30 |
More than 60 |
More than 90 |
Total |
Expected credit loss rate |
|
|
|
|
- |
Estimated total gross carrying amount at default |
CU |
CU |
CU |
CU |
CU |
Lifetime expected credit losses-dealer financing |
CU |
CU |
CU |
CU |
CU |
Customer financing |
|||||
Expected credit loss rate |
|
|
|
|
- |
Estimated total gross carrying amount at default |
CU |
CU |
CU |
CU |
CU |
Lifetime expected credit losses, customer financing |
CU |
CU |
CU |
CU |
CU |
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