When measuring credit losses, include data on climate change

credit-risk

The maturity or term of the financial asset is essential when determining what information to analyse for ECL. FILE PHOTO | SHUTTERSTOCK

Organisations with financial assets carried at amortised costs on their balance sheet should estimate the expected credit losses (ECL) on those assets at every financial reporting date.

This requirement is in line with IFRS 9, the ‘financial instruments’ standard.

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Note: The results are not exact but very close to the actual.