This Appendix outlines supervisory expectations specific to banks reporting under International Financial Reporting Standards (IFRS). It is limited to providing guidance on certain aspects of the expected credit loss (ECL) requirements in the impairment sections of IFRS 9 that are not common to other ECL accounting frameworks. Supervisory guidance on common elements of an ECL accounting framework, such as sound practices for the assessment and measurement of ECL, whether or not the allowance is based on 12-month or lifetime expected losses, is provided in the main section of this paper. The Appendix should be read in conjunction with the main section of the guidance, including the introductory sections that set out the Committee`s view on reasonable and supportable information, materiality and proportionality.

This Appendix provides additional supervisory expectations on: (i) the loss allowance at an amount equal to 12-month ECL; (ii) the assessment of significant increases in credit risk; and (iii) the use of practical expedients.

1. Loss allowance at an amount equal to 12-month ECL