Requirements under the new HKFRS 9 on Expected Credit Loss:
- Most Financial Instruments are subject to Expected Credit Loss Assessments under HKFRS 9.
- ECL typically covers trade receivable, contract assets, loan and other receivables.
- A Simplified Approach for trade receivable based on a Provision Matrix of Lifetime ECL.
- A 3-Stage General Approach for loan and other receivables, and as a policy choice for trade and lease receivables with significant financing component.
- Forward looking economic scenarios and their impacts on a weighted average ECL.
Our Technical Experiences on Credit Loss Analytics:
- Forward-looking adjustments under potential macro-economic scenarios
- Industry-based, counterparty-based credit ratings and empirical probability of default
- Regression analyses on economy-wide default rates against macro-economic drivers
- Company’s historical default and credit loss rate analyses across its receivable’s aging schedule
- Risk groupings, staging and transfers, 12-month and lifetime credit losses
- Benchmarking the concluded loss provision rates against other HKFRS 9 and HKAS 39 preparers
About Valtech Valuation
Valtech Valuation is a professional valuation firm accredited with ISO-9001 in valuation advisory services. The firm is renowned for its expertise in advanced valuation techniques, customized valuation models, data-driven insights, and adherence to compliance and reporting standards. The firm has a solid track record in valuation advisory for listed companies, private equity, fund managers, and financial institutions. Valtech’s qualified team comprises members with PhDs, CPA (HKICPA), CFA, Chartered Valuation Surveyors of the Royal Institution of Chartered Surveyors, and valuers accredited with Business Valuation (ABV) by AICPA and CVA qualifications in Singapore. Valtech continues to expand into more markets by leveraging its valuation platform and recruiting local experts.
