Banking
ECL Stage 2 — Lifetime ECL (Significant Credit Risk Increase)
Increasing provision to lifetime ECL when a loan shows significant deterioration in credit quality.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Impairment Charge (ECL Stage 2 — Increase) | Expense (+) | 80,000.00 | - |
| Allowance for ECL (Stage 2) | Contra-Asset (+) | - | 80,000.00 |
💡 Accountant's Note
A loan moves to Stage 2 when there is a 'Significant Increase in Credit Risk' (SICR) — e.g., 30+ days past due, watchlist status, or sector stress. The provision jumps to lifetime expected losses, which can be 5-10x the Stage 1 amount.
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