IFRS 9 (as adopted by EU)

IFRS 9 ECL Calculator
Ireland

IFRS 9 expected credit loss calculator with Ireland-specific regulatory context, IAASA / CBI 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 Ireland — IFRS 9 (as adopted by EU)

Ireland adopted IFRS 9 Financial Instruments through EU endorsement, effective for annual periods beginning on or after 1 January 2018. Irish entities reporting under IFRS include companies listed on Euronext Dublin (formerly the Irish Stock Exchange) and groups required or choosing to prepare consolidated financial statements under EU-adopted IFRS. The Irish Auditing and Accounting Supervisory Authority (IAASA) is responsible for supervising the quality of financial reporting by public interest entities and has published observations on IFRS 9 ECL disclosure quality. The Central Bank of Ireland (CBI) is the prudential regulator for financial institutions and has issued expectations regarding ECL provisioning and model governance for banks and credit unions. Ireland's significance as a European headquarters location for multinational technology, pharmaceutical, and financial services companies creates substantial intercompany receivable portfolios that require ECL assessment. The post-Brexit reorientation of trade flows between Ireland, the United Kingdom, and the EU has introduced new credit risk dynamics for Irish exporters. Irish GAAP, based on FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland, applies an incurred loss impairment model, creating reconciliation requirements for entities reporting under both frameworks.

Regulatory Context — IAASA / CBI

IAASA has published observations on the quality of IFRS 9 ECL disclosures in its annual reports on the financial reporting activities of public interest entities. Key IAASA observations include concerns about the adequacy of forward-looking information disclosure, the transparency of staging criteria, the quality of sensitivity analysis, and the explanation of management overlays. IAASA has engaged with specific entities to request enhanced disclosures where deficiencies were identified. The Central Bank of Ireland has issued expectations letters and supervisory guidance addressing ECL provisioning for credit institutions, including requirements for model governance, independent validation, and provisioning adequacy assessments. For credit unions supervised by the CBI, specific guidance on ECL implementation has been issued recognising the smaller scale and less sophisticated modelling capabilities of these institutions. The CBI's macroprudential framework, including countercyclical capital buffer decisions, provides insights into the regulator's assessment of systemic credit risk that entities can reference when developing ECL scenarios.

Practical Guidance for Ireland

Irish entities applying the simplified approach for trade receivables should construct provision matrices reflecting the Irish economic landscape. Ireland's highly open economy means that many entities hold receivable portfolios with significant international concentration, particularly from the United States, the United Kingdom, and other EU member states. Segmentation criteria should include customer geography, industry sector (aligned with the CSO NACE Rev.2 classification), customer size, payment terms, and ageing bracket. Forward-looking adjustments should reference Central Statistics Office (CSO) data on GDP and modified domestic demand (GNI* is a more meaningful economic activity measure for Ireland than GDP due to the distortive effects of multinational activity), the ESRI Quarterly Economic Commentary, and Central Bank of Ireland economic projections. The impact of Brexit on cross-border trade receivables with UK counterparties should be explicitly assessed, including customs-related payment delays and potential currency risk on sterling-denominated receivables.

Audit Expectations

Irish auditors performing statutory audits under ISA (Ireland) face specific expectations from IAASA regarding the audit of ECL estimates. IAASA's audit inspection findings have highlighted areas requiring improvement including insufficient independent challenge of management's ECL methodology, limited testing of the data inputs used in ECL models, inadequate assessment of the appropriateness of forward-looking scenarios, and insufficient documentation of the auditor's evaluation of management overlays. Chartered Accountants Ireland and CPA Ireland provide professional guidance to support auditors in addressing these complex estimation areas. IAASA expects auditors to engage specialists where ECL models involve sophisticated statistical techniques.

Ireland-Specific Considerations

Ireland-specific ECL considerations include the unique characteristics of the Irish economy that affect credit risk assessment. The significant presence of multinational companies means that intercompany receivable balances with group entities in various jurisdictions require careful ECL assessment, particularly where the counterparty is in a higher-risk jurisdiction. Modified domestic demand (GNI*) rather than GDP is the preferred macro-economic metric for understanding underlying Irish economic activity, as headline GDP is distorted by the activities of multinational enterprises. The Irish property market has historically experienced significant volatility, and entities with receivable exposures linked to the construction and real estate sectors should incorporate property price indices from the CSO and Central Bank financial stability assessments. Post-Brexit, Irish exporters to the United Kingdom face new customs processes, potential tariff exposures, and sterling currency risk that may increase credit losses on UK receivables. The Irish insolvency framework, including examinership under the Companies Act 2014, provides a court-supervised restructuring process with specific creditor recovery outcomes that should inform loss given default assumptions.

Forward-Looking Data Sources

Modified Gross National Income (GNI*)
Source: Central Statistics Office (CSO)
Ireland-specific economic activity measure that strips out multinational distortions, providing a more accurate basis for domestic ECL scenario development
ESRI Quarterly Economic Commentary
Source: Economic and Social Research Institute
Independent macro-economic forecasts for the Irish economy including GNI* growth, employment, and sectoral analysis
Central Bank of Ireland Economic Projections
Source: Central Bank of Ireland
Quarterly economic forecasts and financial stability assessments providing forward-looking inputs for ECL scenario weighting
CSO Business Demography Statistics
Source: Central Statistics Office
Annual data on enterprise births, deaths, and survival rates providing evidence of counterparty default risk trends in the Irish economy
CSO Residential Property Price Index
Source: Central Statistics Office
Monthly property price data relevant for ECL on receivables exposed to Irish real estate and construction sectors

Common Inspection Findings

GDP used as primary macro-economic indicator instead of GNI* — forward-looking ECL assumptions distorted by multinational activity inflating Irish headline GDP

Brexit impact on UK trade receivables not separately assessed — no adjustment for customs delays, sterling risk, or changed UK market conditions

Intercompany receivables with overseas group entities excluded from ECL assessment without evaluating the credit risk of the counterparty subsidiary

Forward-looking scenarios not probability-weighted — single base-case scenario used without downside or upside alternatives

Auditor did not adequately evaluate the competence of management's ECL modelling expert — independence and objectivity assessment missing

Frequently Asked Questions — Ireland

What has IAASA observed regarding IFRS 9 ECL disclosure quality in Ireland?
IAASA has identified several areas for improvement in Irish listed entity disclosures: insufficient explanation of how forward-looking macro-economic information is selected and incorporated into ECL models, lack of quantified sensitivity analysis showing the impact of alternative assumptions on the ECL balance, generic or boilerplate disclosure language that does not reflect entity-specific credit risk, inadequate disclosure of management overlay rationale and quantification, and weak linkage between risk management disclosures and the ECL methodology.
Why should Irish entities use GNI* rather than GDP for ECL forward-looking assumptions?
Ireland's GDP is significantly distorted by multinational corporate activities, including intellectual property relocations and aircraft leasing, which inflate headline GDP far beyond underlying domestic economic activity. GNI* (modified gross national income) was introduced by the CSO to provide a more accurate measure of Irish domestic economic performance. For ECL purposes, GNI* growth is a more meaningful indicator of the credit risk environment faced by domestic Irish businesses and consumers. The ESRI and Central Bank typically reference GNI* in their economic analyses.
How should Irish entities assess ECL on cross-border UK receivables after Brexit?
Post-Brexit, Irish exporters to the UK face additional credit risk factors including customs processing delays that extend payment collection timelines, potential tariff and regulatory compliance costs that strain UK customer finances, sterling depreciation risk for GBP-denominated receivables, and regulatory divergence that may affect product certifications. Irish entities should consider establishing a separate UK receivable segment in their ECL provision matrix with enhanced forward-looking adjustments reflecting these Brexit-specific risk factors.
What guidance has the Central Bank of Ireland issued on ECL for credit institutions?
The CBI has issued supervisory expectations covering ECL model governance frameworks, independent model validation requirements, provisioning adequacy assessments, incorporation of forward-looking macro-economic scenarios, and management overlay governance. For credit unions, the CBI has provided specific guidance recognising their smaller scale, including simplified approaches to ECL estimation and practical tools. The CBI aligns with ECB expectations for significant institutions under the Single Supervisory Mechanism.
How does the Irish examinership process affect ECL loss given default estimates?
Examinership under the Companies Act 2014 provides court protection for up to 150 days during which a company can restructure. Creditor recovery rates under examinership vary, but secured creditors typically recover more than unsecured trade creditors. Historical examinership outcomes should inform loss given default assumptions for Irish corporate receivables. Where a customer enters examinership, the receivable should be assessed for transfer to Stage 3, and loss given default should reflect the expected creditor scheme of arrangement terms.

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