In summary to contrast how expected credit losses are accounted for under IFRS and US gaap.

IFRS has three stages to determine the calculation of expected credit losses.

Stage one for performing assets includes expected credit losses for the next 12 months.

Only. Stage two for underperforming assets includes expected lifetime credit losses, but base interest on the gross asset value.

And stage three for impaired assets which are typically delinquent for over 90 days, where we include expected lifetime credit losses as with stage two, but base interest in the income statement on the net asset value after taking account of expected credit losses under US gaap, there are no stages and the accounting treatment matches that of stage two.

Under IFRS, this means that US GA proactively takes account of all expected lifetime losses from the date of origination, but IFRS only does this once. There has been some increased risk of the loss occurring when the asset has moved into stage two.

This also means that the size of the provision for loan losses will increase more under IFRS as the risk of default increases.

Since the risk of default of the entire life only becomes part of the calculation as the loan moves to be classified as stage two.