Definition
Stage 1 Assets, in the context of IFRS 9 are financial instruments that either have not deteriorated significantly in credit quality since initial recognition or have low credit risk.
The term Stage 1 is not formally defined in the standard[1] but has become part of the common description of the IFRS 9 methodology, including regulatory documentation.
The IFRS 9 standard formally defines the conditions that constitute a Significant Increase in Credit Risk, which necessitated the migration of an asset from stage 1 to stage 2 (and vice versa in case of a decrease)
Accounting Implications
Under IFRS 9, Stage 1 Assets
- Must recognise 12-month Expected Credit Losses
- Interest revenue is accrued on the basis of the Gross Carrying Amount
See Also
References
- ↑ IFRS Standard 9, Financial Instruments 5.5.5
