Gross Carrying Amount

From Open Risk Manual

Definition

Gross Carrying Amount, in the context of IFRS 9 [1], is the Amortised Cost of a financial asset, before adjusting for any Loss Allowance

Formula

Expressed as a derived measure, the formula for the gross carrying amount simply reflects the fact that it is defined as the amortized cost without the loss allowance deduction


\mbox{GCA}_t =  \mbox{AC}_{t} + \mbox{LA}_{t}

In terms of cashflows, given a set of expected cashflows {\textstyle C_{i}} (with index running from 1 to n) and a set of discount factors D calculated using the compound Effective Interest Rate over the expected life T of a financial asset, the GCA is obtained as follows:


\mbox{GCA}_t =  \sum_{i=1}^{n} D_{i}(r)  C_{i}

where the discount factor for period (i) is given by


D_i =  \frac{1}{(1 + r)^{i}}

See Also

References

  1. IFRS Standard 9, Financial Instruments

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