IAS39 differentiates two stages:
- Incurred but not reported losses (IBNR)
- Objective evidence of impairment
The solution covers for both stages the required process chain:
For IBNR it covers the calculation of risk provision based on portfolios. For each portfolio the specific Probability of Default and Loss Given Default can be
- calculated based on historic default information or it can be
- delivered from any source.
The combination of both, the loss-rate, will be applied to the Gross Carrying Amount.
For the customer specific consideration of objective evidence in the specific provisioning process two options are provided:
Recovery Cash flows can be
- imported from any source or
- captured in the Customer Impairment Workbench.