Application Of Expected Credit Loss Impairment Model In China

China's ministry of finance officially issued CAS22 in March 2017,the rule of financial instruments from classification,measurement and accounting treatment of hedging three aspects has carried on the revision,IFRS9 comprehensive convergence IASB issued in 2009.The newly revised financial instrument standard adopts the expected credit loss model as the new impairment provision tool to replace the existing loss law of the old standard.This measure is to change the defect that has occurred in the reduction model,which makes credit risk difficult to disclose and control in advance.As an important part of China's capital market and the active participants,Orient securities is the realization of A & H shares listed one of the ten securities company,should be on January 1,2018 to adopt new standards of reporting work.The expected credit loss model adopted by the new guidelines has changed greatly from the loss method,which mainly includes the measurement basis and the measurement range.As an important part of the capital market,the daily transaction involves the confirmation and measurement of a large number of financial instruments.Asset management business and predominantly fixed-income proprietary trading business is Orient securities consistent advantage,also make the Orient securities assets structure is different from the trade company,which affected by the depreciation method of replacement in new standard.With foreign commercial Banks have since introduced IFRS9 years application experience of ECL model,the purpose of this paper is to combine the foreign and domestic large commercial Banks on credit risk estimating experience,combined with recent years relevant historical data.A rating agency,ECL analysis model to our country securities company can create what aspects of influence,to fill the blank of the current related research.This paper,which is case study,standing on December 31,2016 point,comparing the expected loss has occurred credit loss model and the model of Orient securities financial statement level and impact on the level of business development.Use of the same caliber estimation method for the rest of the 9 A & H shares listed securities companies using ECL model.The impact of the problems in the process of application,and combined with their own point of view and industry point of view,put forward the application of the new guidelines in regulation and enterprise itself should make A change and response.The research results are as follows:1.Expected the introduction of credit loss model and implementation in accordance with the current regulatory capital market demand,will credit risk forecast and control put in an important position,the estimation of credit losses from simple back-of-the-envelope calculation into active assessment and management in advance.2.ECL model implementation of the quality of the company in acquiring related data and information of investment,the overall market development degree is related to the database and the establishment of the management information system can improve the quality of the application of the model.ECL models intend to smooth profits for a long time,avoid the credit risk concentration of the financial statements,but in the code,switching will cause short-term fluctuations,as well as the lack of comparability of accounting information and so on.