Stage 3 Assets

Definition

Stage 3 Assets, in the context of IFRS 9 are financial instruments that offer objective evidence of a credit loss event.

The term Stage 3 is not formally defined in the standard but has become part of the common description of the IFRS 9 methodology.

In broad terms Stage 3 Assets are the ones for which the older IAS 39 standard considered impairment allowances

Accounting Implications

Under IFRS 9, Stage 3 Assets

• Must recognise Lifetime Expected Credit Losses
• Interest revenue is accrued on the basis of the Net Carrying Amount

See Also

• Stage 1 Assets
• Stage 2 Assets
• IFRS 9

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