Definition
Expected Credit Loss – The IFRS 9 loan-loss provisioning model that requires a lender to book an estimated future credit loss on a loan or credit-card receivable at the moment it's originated, rather than waiting for the borrower to actually miss a payment. This creates a deliberate timing mismatch for a fast-growing lender: the provision expense on a new loan is recognized upfront, while the interest/fee revenue on that same loan accrues gradually over its life, so the faster a credit book grows, the more its near-term gross profit is depressed by provisioning that isn't really a sign of bad underwriting. Found In: Income Statement (credit loss allowance expense), Notes to Financial Statements (credit risk)