-
Hello Janet. This is certainly one of those standards that can make a relatively simple situation feel rather complicated. If your organisation has experienced very few write-offs historically, that experience is certainly relevant when estimating expected credit losses. I would be inclined to start with the actual historical experience rather than automatically applying a large percentage. That said, a zero loss rate may need some careful documentation and discussion with your auditor. You could also consider whether older receivables carry a slightly higher risk. I would keep the approach proportionate to the actual risk and clearly document the reasoning.