Accounting · Financial Instruments under Ind AS
Under Ind AS 109, what is the most significant change from the earlier AS regarding the recognition of impairment for financial assets like loans and advances?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Provisioning is strictly based on a fixed percentage determined by the government, regardless of actual risk.
- 2It follows the 'Incurred Loss' model, recognising losses only when objective evidence of impairment exists.
- 3It uses the Expected Credit Loss (ECL) model, focusing on losses expected over the asset's life.✓
- 4Impairment is now only recognised at the time of write-off.
Correct answer
It uses the Expected Credit Loss (ECL) model, focusing on losses expected over the asset's life.
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