Appendix A

AndrewLAndrewL
in CIA.IFRS17-PAA

For group B, once it passed threshold 2, should not we assess if group is onerous? Same goes for threshold 3.

I would personally compare PAA and GMA estimate and book LC if GMA estimate > PAA estimate.

Comments

  • Staff-T1Staff-T1
    It's less than or equal to 1% of the revenue so you don't need to assess if it's onerous
  • AndrewLAndrewL

    Hello @Staff-T1 and @graham ,

    Being less than 1% indicates that it is PAA eligible. It does not indicate that there is no need for LC.

    If I recall properly, LRC under PAA = (LRC excluding LC) + LC

    1. Group C can use PAA and PAA LRC > GMA LRC. Therefore no LC is needed.
    2. Group D should use GMA. How to know if we need LC since we do not know if onerous.
    3. Group B did not provide info on GMA LRC, so we cannot calculate LC, which is my initial question.

    Could you please let me know?

    Thanks,
    Andrew

  • Staff-T1Staff-T1

    It says in the example that they are not onerous so why do we need to assess if there is a LC?

  • mandatory_coveragesmandatory_coverages
    edited February 13

    where does it say that group B is non onerous? it says group A1 is non onerous, is it non onerous if there's no GMA estimate? in a similar way why dont group C&D need a loss component/why arent they onerous?

  • Staff-T1Staff-T1

    Please see the screenshot below from page 19, second last bullet point

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