This free, guided checker walks your finance team through the key decision points for IFRS 9 Individual Impairment Assessment. Answer a few questions to see the likely treatment and the evidence to document.
Answer a few quick questions below. It is private - nothing is submitted or stored - and takes about a minute.
This tool is a high-level IFRS screening aid for general information only and is not accounting, audit or legal advice. Conclusions require entity-specific evidence and judgement - confirm the treatment with your advisor.
Here is what the checker asks and why each step matters. Prefer to talk it through? Contact us and we will help directly.
Individual assessment applies to loans, bonds, and other financial assets not using the simplified lifetime ECL approach for trade receivables.
Route the exposure to the simplified approach (IFRS 9.5.5.15) or to its FVTPL or other measurement basis; the general three-stage ECL model does not apply.
Official guidance: IFRS issued standards
Significant or non-homogeneous exposures, watchlist credits, and modified loans typically require individual assessment even when a portfolio model exists.
Apply the validated collective ECL model; IFRS 9.B5.5.4 requires lifetime ECL to be recognized on a collective basis where SICR is only observable at portfolio level.
Official guidance: IFRS issued standards
SICR is a relative test: compare the risk of a default occurring over the expected remaining life at the reporting date with the risk expected for that same remaining period at origination. Retain origination ratings, PDs, and pricing so the comparison is anchored. A common misapplication is substituting an absolute reporting-date risk level for the required comparison against initial recognition.
Obtain the origination credit file first; IFRS 9.5.5.9 requires comparing the risk of default at the reporting date with the risk of default at initial recognition.
Official guidance: IFRS issued standards
Include macroeconomic scenarios, industry outlook, borrower-specific events, and collateral values without double-counting information already in historical rates.
Complete the forward-looking overlay before staging; IFRS 9.5.5.9 requires reasonable and supportable information about future conditions, not delinquency history alone.
Official guidance: IFRS issued standards
Indicators include rating migration, covenant breaches, forbearance, watchlist status, adverse macro changes, and significant changes in collateral coverage.
Work through the IFRS 9.B5.5.17 indicator list for the exposure; SICR is a multifactor, holistic assessment, not a single-metric test (IFRS 9.B5.5.16).
Official guidance: IFRS issued standards
IFRS 9 presumes SICR when contractual payments are more than 30 days past due unless rebutted with reasonable and supportable information.
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Official guidance: IFRS issued standards
Investment-grade or equivalent low-risk exposures may remain in Stage 1 even when other qualitative SICR indicators exist, if low credit risk is supportable.
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Official guidance: IFRS issued standards
Compare lifetime probability of default, use absolute and relative measures, and document any rebuttal of the past-due presumption.
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Official guidance: IFRS issued standards
Stage 1 ECL reflects the portion of lifetime credit losses associated with defaults possible within the next twelve months on a probability-weighted basis.
Complete the Stage 1 inputs before finalizing the allowance; IFRS 9.5.5.17 requires an unbiased probability-weighted amount reflecting the time value of money and supportable forecasts.
Official guidance: IFRS issued standards
Credit impairment may be evidenced by significant financial difficulty, breach, concession, probable bankruptcy, or disappearance of an active market.
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Official guidance: IFRS issued standards
Discount expected credit losses on the basis of expected cash shortfalls over the expected life, incorporating collateral recoveries and time value of money.
Update lifetime ECL for collateral valuations and recovery timing; IFRS 9.B5.5.55 requires expected cash shortfalls to reflect collateral cash flows net of the costs of obtaining and selling it.
Official guidance: IFRS issued standards
Disclose SICR criteria, transfers between stages, modifications, write-offs, and reconciliations of the loss allowance.
Individual impairment assessment and the IFRS 7.35F-35N credit-risk disclosures are complete; file the staging memo and allowance support. Complete the IFRS 7.35F-35N credit-risk note, including the IFRS 7.35H loss-allowance reconciliation by stage, before closing.
Official guidance: IFRS issued standards
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