Enhancing ECL Assessments
Valtech remains proactive in collaborating with CPA firms and auditors to address queries raised by the Accounting and Financial Reporting Council (AFRC) regarding complex valuation processes. A key issue frequently discussed is the relevance of adopting Moody’s research data for expected credit loss (ECL) assessments, particularly when counterparties are based in Hong Kong or Mainland China.
While Moody’s research provides valuable global insights, its applicability to receivables involving local counterparties in Hong Kong and China has been questioned due to regional economic and market differences. Recognizing this challenge, Valtech has undertaken extensive research and brainstorming to refine its ECL assessment methodology.
To address the concerns of auditors and the AFRC, Valtech has shifted away from relying solely on Moody’s data, instead adopting alternative approaches tailored to the Hong Kong and China markets. These new methods incorporate localized data sources and advanced analytical techniques to ensure greater relevance and accuracy in ECL assessments, aligning with regulatory expectations and enhancing the robustness of financial reporting.
Valtech’s commitment to continuous improvement ensures that its valuation services remain compliant, defensible, and aligned with the unique dynamics of the Asia-Pacific region, providing clients with reliable and high-quality valuation insights.
