Forward-Looking Information (FLI) Framework

The COVID-19 pandemic affected financial markets, and virtually all industries face challenges associated with the economic conditions resulting from efforts to address it. As the pandemic increased in magnitude and duration, entities experienced conditions often associated with a general economic downturn. This included, but was not limited to, financial market volatility and erosion, deteriorating credit, liquidity concerns, further increases in government intervention, increasing unemployment/layoffs, broad declines in consumer discretionary spending, increasing inventory levels, reductions in production because of decreased demand, supply chain derangements, and other restructuring activities.

Read our publication as we unpack these key considerations for incorporating Forward-Looking Information (FLI) and credit overlay adjustments in an IFRS 9 ECL model using a hybrid approach.