CECL vs IFRS 9: the differences, paragraph by paragraph
The two standards measure trade receivables the same way and loans very differently. Here is each difference with the paragraph that makes it, and the same receivables measured under both. Bring your own aging report or loan tape to measure it under either.
Credit loss allowance
The allowance, the journal entry and a draft disclosure note.
The same receivables, under both
Each standard-setter’s own worked example, measured under each standard by the same calculation an uploaded aging report goes through.
| The book | Under IFRS 9 | Under CECL |
|---|---|---|
| IFRS 9 Illustrative Example 12 (IE74–IE77) | CU 580,000.00 | CU 580,000.00 |
| ASC 326 Example 5A, Case 1 (326-20-55-40E) | $20,645.81 | $20,645.81 |
The same, to the cent: both standards take lifetime losses on trade receivables, as a loss rate by age. What differs is what you file — the account names, a US roll-forward that carries recoveries, and a note with no stages.
Where they differ
| IFRS 9 | CECL (ASC 326-20) | |
|---|---|---|
| When lifetime losses are recognised | Twelve-month expected losses until credit risk has increased significantly since initial recognition, lifetime after (5.5.5, 5.5.3). | Lifetime from the day the asset is recognised: expected losses over its contractual term (326-20-30-1, 30-6). No stages. |
| Trade receivables | Always lifetime expected losses for trade receivables and contract assets within IFRS 15 (5.5.15). | Lifetime too. An aging schedule is one of the methods named (326-20-30-3). |
| Over what period | The maximum contractual period, including extension options (5.5.19) — except revolving facilities, over the period exposed to credit risk (5.5.20). | The contractual term (326-20-30-6). Off-balance-sheet exposures over the period of a present obligation to extend credit, and none where it is unconditionally cancellable (30-11). |
| Scenarios | An unbiased, probability-weighted amount over a range of possible outcomes (5.5.17(a)). | Reasonable and supportable forecasts; several weighted scenarios are not required (FASB Staff Q&A, Topic 326, No. 2). |
| Beyond the forecast | Reasonable and supportable information available without undue cost or effort, including forecasts (5.5.17(c)). | Revert to historical loss information for periods beyond the reasonable and supportable forecast (326-20-30-9). |
| Time value of money | Always reflected (5.5.17(b)). | Only where the method projects cash flows — a discounted cash flow method, at the effective interest rate (326-20-30-4). |
| A remote loss | The possibility of a loss is reflected even if it is very low (5.5.18). | Measured even if the risk is remote, unless nonpayment is expected to be zero (326-20-30-10). |
| Bought already impaired | Purchased or originated credit-impaired: only the cumulative change in lifetime losses since initial recognition is an allowance (5.5.13). | Purchased with credit deterioration: the allowance at acquisition is added to the price to give amortized cost (326-20-30-13). |
| What the lines are called | Loss allowance; impairment gain or loss (5.5.8). | Allowance for credit losses; credit loss expense (326-20-30-1). |
What this calculator measures
Trade receivables and contract assets under either standard — the IFRS 9 provision matrix or the CECL aging schedule, with the ASU 2025-05 options. Loans under IFRS 9. A loan in a US GAAP allowance is refused rather than measured the IFRS 9 way and relabelled, because CECL measures it differently from the first day.
Questions
Is CECL the same as IFRS 9?
- No. Both measure expected credit losses, but CECL recognises a loan's losses over its whole life from the day it is made (ASC 326-20-30-6), while IFRS 9 recognises twelve months of them until credit risk has increased significantly (IFRS 9 5.5.5, 5.5.3). For trade receivables they come to the same thing: IFRS 9 always measures those over their whole life (5.5.15).
Does CECL have stages?
- No. There is no significant-increase test and no twelve-month measure: every asset in scope carries lifetime expected losses from initial recognition.
Which gives the higher allowance?
- For a performing loan on the same inputs, CECL's: it covers the whole life where IFRS 9's covers twelve months. Other differences — IFRS 9 requires probability weighting and the time value of money (5.5.17), CECL discounts only in a discounted cash flow method (ASC 326-20-30-4) — can move it either way. For trade receivables the two agree.
Does CECL require probability-weighted scenarios?
- No. IFRS 9 requires an unbiased, probability-weighted amount (5.5.17(a)). CECL asks for reasonable and supportable forecasts and a reversion to historical loss information beyond them (ASC 326-20-30-9), and the FASB staff have said several weighted scenarios are not required (Staff Q&A, Topic 326, No. 2).