Under the expected credit loss model, an allowance is recognised before a loss occurs. Banks apply a three-stage model; for trade receivables, a simplified approach (lifetime expected losses) and a provision matrix can be used.
The provision for doubtful receivables under tax legislation and expected credit losses under TFRS 9 are based on different criteria.
Source: TFRS 9
Related terms
Financial instruments (TFRS 9)The standard governing the classification, measurement and impairment of financial assets and liabilities, and hedge accounting.Amortised costThe amount at which a financial asset or liability is measured at initial recognition, minus principal repayments, plus cumulative amortisation calculated using the effective interest method.Accounting policiesThe specific principles, bases, conventions, rules and practices an entity applies in preparing its financial statements.AssociateAn entity over which the investor has significant influence but not control or joint control.BOBİ FRS (Turkish GAAP for SMEs)The financial reporting standard issued by the POA for large and medium-sized entities that are subject to independent audit but do not apply TFRS.Business combinationA transaction or event in which an acquirer obtains control of one or more businesses.
Last updated: October 22, 2026 · This definition is for general information only.