Page 170 - KWAP_AR2022

168 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) FoR BEttER REtURNS

notes to the
financial statements
for the year ended 31 december 2022

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.19 Impairment Of Financial Assets (continued)

(a) Financial assets accounted for at Amortised Cost and FVOCI

there are three (3) categories of financial assets accounted for at amortised cost and fVoci which reflect
their respective credit risk and determination of the loan loss provision of each category.

at each reporting date, the group and KWap measure the ecl through a loss allowance at an amount equal
to the 12-months ecl provided that there is no significant increase in the credit risk of a financial instrument
or a group of financial instruments since the initial recognition. for all other financial instruments, a loss
allowance at an amount equal to the lifetime ecl is required.

a summary of the assumptions in relation to the ecl model of each category is as follows:
(i) Stage 1: 12-months ECL

for credit exposures where there was no significant increase in the credit risk since the initial recognition
and no credit impairment since origination, a portion of the lifetime ecl associated with the possibility
of the occurrence of default events within the next 12 months is recognised.
(ii) Stage 2: Lifetime ECL – not credit impaired

for credit exposures where there was a significant increase in the credit risk since the initial recognition
but no credit impairment since origination, a lifetime ecl is recognised. a significant increase in the
credit risk is presumed if the interest and/or principal repayments are more than 30 days but less than
89 days past due.

(iii) Stage 3: Lifetime Expected Credit Loss – credit impaired

financial assets are assessed as credit impaired upon the occurrence of one or more events with
detrimental impact to the estimated future cash flows of the asset. for financial assets with credit
impairment, a lifetime ecl is recognised.
on the term of the financial assets, the group and KWap account for the credit risk by the appropriate
provision of the ecl on a timely basis, whereby the historical loss rates for each category of financial asset
is taken into consideration in the calculation of the ecl rates and adjusted for forward-looking
macroeconomic data.
there were no significant changes to the estimation techniques or assumptions in relation to the ecl during
the reporting period.