Calculate loss allowance for the amortizing loan originated by Savya Ltd.

CA Final · Integrated Business Solutions (Multidisciplinary Case Study) · MTP · May 2025
Calculate loss allowance for the amortizing loan originated by Savya Ltd.

Suggested Answer and Working Notes:

At reporting date, no change in 12-month POD and entity assesses that there is no significant increase in credit risk since initial recognition – therefore lifetime ECL is not required to be recognised. Particulars Details Loan 100,00,00,000 (A) LGD 25% (B) PoD – 12 months 0.5% (C) Loss allowance (for 12-months ECL) 12,50,000 (A×B×C)
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