How to record own credit risk in OCI
Recognizing the change in fair value of a financial liability designated at FVTPL that is attributable to changes in the entity's own credit risk.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Financial Liability (FVTPL) | Liability | 1,200.00 | - |
| OCI (Own Credit Risk Reserve) | Equity | - | 1,200.00 |
💡 Accountant's Note
For liabilities designated as FVTPL, IFRS 9 requires the portion of the fair value change attributable to the entity's own credit risk to be presented in OCI rather than P&L.
Practitioner & Systems Framework
💻 ERP Architecture
The fair value adjustment routine must distinguish between market interest rate changes (P&L) and credit spread changes (OCI).
⚠️ Audit Flags
Recognition of own credit risk gains/losses in P&L instead of OCI for designated liabilities.
📄 Required Documentation
Credit spread analysis and valuation report detailing the components of fair value change.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.
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