IFRS 9 (as adopted by EU)

IFRS 9 ECL Calculator
France

IFRS 9 expected credit loss calculator with France-specific regulatory context, AMF / H3C expectations, and local macroeconomic indicators for forward-looking adjustments.

Provision Matrix

Define aging buckets, enter gross carrying amounts and historical loss rates. Per IFRS 9.B5.5.35.

Forward-Looking Adjustment

Required by IFRS 9.5.5.17. Purely historical rates are not IFRS 9 compliant.

Advanced Features

Optional: probability-weighted scenarios, movement schedule, specific assessment, and entity details.

IFRS 9 ECL Audit Working Paper Template — free PDF

Practical audit guide covering the simplified approach provision matrix methodology, forward-looking adjustment documentation template, probability-weighted scenario framework, IFRS 7.35H movement schedule template, common ISA 540 findings on ECL estimates, and industry benchmark loss rates for 12 sectors.

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IFRS 9 ECL in France — IFRS 9 (as adopted by EU)

France adopted IFRS 9 Financial Instruments through EU endorsement, effective for annual periods beginning on or after 1 January 2018. French entities reporting under IFRS include companies listed on Euronext Paris and groups required or choosing to prepare consolidated financial statements under IFRS. The Autorité des Marchés Financiers (AMF) supervises the quality of financial reporting for listed entities and publishes annual recommendations on the preparation of financial statements, which regularly address IFRS 9 ECL implementation issues. The Haut Conseil du Commissariat aux Comptes (H3C) is the audit oversight body responsible for inspecting the quality of statutory audits performed by Commissaires aux Comptes. French entities that also prepare individual financial statements under French GAAP (Plan Comptable Général, or PCG) must navigate differences between the PCG incurred loss approach to impairment and the IFRS 9 expected credit loss model. The Autorité de Contrôle Prudentiel et de Résolution (ACPR) provides additional guidance for banks and financial institutions regarding ECL model governance and validation.

Regulatory Context — AMF / H3C

The AMF publishes annual recommendations for the preparation of financial statements that frequently address IFRS 9 ECL topics. Key AMF recommendations have covered the transparency of macro-economic assumptions and scenario weightings used in ECL models, the disclosure of management overlays and post-model adjustments, the clarity of staging criteria explanations, and the quality of sensitivity analysis for material ECL estimates. The AMF has noted that some French listed entities provide insufficient detail on how they define and detect significant increases in credit risk, particularly for large homogeneous portfolios of trade receivables. The H3C has conducted thematic inspections focused on the audit of ECL estimates, identifying areas where Commissaires aux Comptes need to strengthen their challenge of management's methodology and assumptions. The ACPR, working alongside the ECB within the Single Supervisory Mechanism, has issued guidance on ECL model validation requirements for French credit institutions, covering model development, implementation, ongoing monitoring, and independent review.

Practical Guidance for France

French entities applying the simplified approach for trade receivables should build provision matrices that reflect the structure of the French economy. Segmentation criteria should include customer sector (aligned with the NAF/APE classification used by INSEE), customer size, geographic exposure, payment terms, and ageing bracket. French law provides specific payment term regulations under the Loi de Modernisation de l'Économie (LME), which limits inter-enterprise payment terms to 60 days from invoice date or 45 days end of month. Compliance with LME payment terms affects expected collection timelines and should be considered in ECL modelling. Forward-looking adjustments should reference INSEE macro-economic data including GDP growth forecasts, unemployment projections, business creation and failure statistics, and the INSEE business climate indicator (indicateur synthétique du climat des affaires). The Banque de France's FIBEN database provides credit risk assessments of French companies that may serve as external data inputs for ECL calibration.

Audit Expectations

Commissaires aux Comptes auditing IFRS 9 ECL in France must comply with the Normes d'Exercice Professionnel (NEP) and International Standards on Auditing. The H3C's inspection findings have highlighted recurring weaknesses in the audit of ECL: insufficient testing of the accuracy of data inputs underlying ECL models, limited independent assessment of the statistical models used to estimate probability of default and loss given default parameters, over-reliance on management representations regarding forward-looking assumptions without corroborating evidence, and inadequate documentation of the auditor's evaluation of staging criteria. The H3C expects Commissaires aux Comptes to involve specialists where ECL methodologies are complex and to perform back-testing analysis as part of their assessment of management's estimation process.

France-Specific Considerations

France-specific ECL considerations include the impact of French employment protection legislation on corporate credit risk. France's relatively strong labour protections affect corporate cost structures and restructuring timelines, which can influence the recovery period and loss given default for corporate receivables. The French Tribunal de Commerce system for insolvency proceedings, including sauvegarde, redressement judiciaire, and liquidation judiciaire, has specific timelines and creditor recovery rates that should inform LGD assumptions. The widespread use of affacturage (factoring) in France affects the receivable population subject to ECL — factored receivables without recourse are derecognised and excluded from ECL calculations, while those with recourse require continued ECL assessment. French entities should also consider the Banque de France's scoring system (cotation Banque de France), which rates the creditworthiness of French companies and provides a useful external data source for ECL calibration.

Forward-Looking Data Sources

INSEE Business Climate Indicator
Source: Institut National de la Statistique et des Études Économiques
Monthly composite indicator summarising French business confidence across manufacturing, services, retail, and construction sectors
INSEE GDP Growth Forecast
Source: INSEE Note de Conjoncture
Quarterly macro-economic projections for France providing baseline assumptions for ECL scenario development
Banque de France Business Failures
Source: Banque de France
Monthly data on corporate insolvency proceedings providing direct evidence of counterparty default risk in the French market
ACPR Credit Risk Dashboard
Source: Autorité de Contrôle Prudentiel et de Résolution
Quarterly indicators of credit risk in the French banking sector including non-performing loan ratios and provisioning levels
Banque de France Cotation
Source: Banque de France (FIBEN database)
Credit scoring system covering approximately 270,000 French companies, providing external PD calibration benchmarks

Common Inspection Findings

Staging criteria and SICR thresholds not adequately documented — insufficient explanation of quantitative and qualitative indicators used to detect credit deterioration

Forward-looking macro-economic scenarios limited to INSEE base case without probability-weighted alternatives as required by IFRS 9.5.5.17

Factored receivables incorrectly derecognised — recourse provisions in factoring agreements not adequately analysed against IFRS 9.3.2 derecognition criteria

ECL sensitivity disclosures insufficient — impact of alternative scenario weightings on total ECL balance not quantified

Banque de France cotation scores not used or considered despite availability — external data source for credit risk assessment overlooked

Frequently Asked Questions — France

What IFRS 9 ECL recommendations has the AMF issued for French listed entities?
The AMF's annual recommendations have addressed several ECL topics: the need for transparent disclosure of macro-economic scenarios and their probability weightings, clear explanation of how management overlays are determined and governed, detailed description of staging criteria and SICR thresholds, and quantified sensitivity analysis showing the impact of alternative assumptions. The AMF has noted that best-practice entities provide reconciliation tables showing ECL movements by stage and by portfolio segment.
How does French GAAP (PCG) impairment differ from IFRS 9 ECL?
Under the Plan Comptable Général, impairment of receivables follows an incurred loss model. Provisions for doubtful debts (provisions pour dépréciation des créances douteuses) are recognised when there is objective evidence that a receivable is unlikely to be collected, such as customer insolvency proceedings. IFRS 9 requires forward-looking ECL recognition from day one for all financial assets. Dual reporters must maintain separate impairment calculations, and the difference between PCG provisions and IFRS 9 ECL creates deferred tax implications.
What INSEE data should French entities use for forward-looking ECL adjustments?
INSEE publishes several indicators relevant to ECL: the indicateur synthétique du climat des affaires (business climate indicator), GDP growth forecasts (Note de Conjoncture), unemployment rates, consumer confidence indices, and business creation and failure statistics. The INSEE sectoral production indices can be used for industry-specific forward-looking adjustments. Entities should document the statistical relationship between their chosen INSEE indicators and historical default rates through correlation or regression analysis.
How should French entities handle factored receivables in ECL calculations?
Factored receivables without recourse (affacturage sans recours) are derecognised under IFRS 9 since substantially all risks and rewards have been transferred, and no ECL is recognised. Factored receivables with recourse (affacturage avec recours) remain on the balance sheet since the entity retains credit risk, and lifetime ECL under the simplified approach must be measured. The factoring agreement terms must be carefully analysed to determine whether derecognition criteria under IFRS 9.3.2 are met.
What has the H3C found regarding audit quality for IFRS 9 ECL in France?
H3C inspections have identified weaknesses including insufficient challenge of management's probability of default models, limited testing of input data accuracy and completeness, over-reliance on management's own experts without evaluating their objectivity, inadequate documentation of the auditor's risk assessment for ECL estimation, and failure to perform retrospective back-testing comparing prior-year ECL estimates with actual outcomes. The H3C has emphasised the need for auditors to engage independent credit risk specialists.

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