Removal of irrecoverable receivables from the asset

What criteria should financial institutions that apply Section 5.5 of IFRS 9 for the accounting recognition of impairment of their financial assets take into account for the purposes of eliminating irrecoverable receivables from the asset?

The requirements for the write-off of a financial asset set out in paragraph 5.4.4 must be observed. of IFRS 9 and B3.2.16(r) of its Implementation Guide: when the entity does not have a reasonable expectation of recovering contractual cash flows. This would constitute an event of deregistration – total or partial – of the financial asset in question.

In addition, the derecognized credits that should be disclosed in off-balance sheet items would be those corresponding to financial assets that, having been “written off” (within the meaning of IFRS 9 5.4.4), are still subject to a compliance activity (reference: paragraphs 35F(e) and 35L of IFRS 7 and paragraph FC48J of the Rationale to the Conclusions of that standard).

Rules involved:

IFRS 9 – Financial instruments
IFRS 7 – Financial Instruments: Disclosures