Banking
Collateral Revaluation — Property Value Decline
Increasing ECL provision after a property held as collateral declines in market value.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Impairment Charge (LGD Increase — Collateral) | Expense (+) | 150,000.00 | - |
| Allowance for ECL (Increased) | Contra-Asset (+) | - | 150,000.00 |
💡 Accountant's Note
Collateral value directly affects LGD in ECL models. When property values fall, LGD increases, requiring a higher provision even if the borrower continues to pay. Annual collateral revaluations are required by the CBJ.
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