Under us gap credit losses are accounted for on a current expected credit loss model.

These are not losses that have already been incurred, but rather are estimates of anticipated losses on financial assets and is a forward looking measure.

The current expected credit losses are calculated based on the full expected loss during the entire lifetime of a loan or other financial assets, and it's recognizing the financial statements upfront or when the loan is first issued or the asset acquired.

The value of the current expected credit loss is calculated by multiplying the probability of default across the asset's entire life by the loss if the default occurs, which is an estimation of the expected recoverable amount if default were to occur.

Finally, under US GA interest income is always calculated by applying the interest rate on the loan or financial assets to the gross amount of a loan, ignoring entirely the expected losses that are reflected in the balance sheet.