Page 264 - BAM ONE REPORT 2565 (ENGLISH VERSION)

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Group 3: Financial assets that are credit-impaired (Non-performing)

Financial assets are assessed as credit impaired when one or more events expected to have
a detrimental impact on the estimated future cash flows of the asset occur. The Company
recognises the expected credit loss at the amount equal to expected credit loss over the

expected lifetime of the financial assets.

At the end of each reporting period, the Company assesses whether the credit risk of financial
assets has increased significantly since the initial recognition, by comparing the risk of
Bangkok Commercial Asset Management Public Co., Ltd.
expected default on the financial assets as at reporting date with the risk of default as at the

initial recognition date. For the evaluation, the Company may use internal quantitative or
qualitative criteria of the Company as a basis for assessing the deterioration in credit quality,

such as arrears of over 30 days past due, follow up duration of debt repayment for debt
restructuring. In assessing of whether credit risk has increased significantly since the initial
recognition date may be conducted individually or collectively for groups of financial assets.

Financial assets are considered to be credit- impaired when one or more events occurs
affecting the estimated future contractual cash flows of the counterparties. Evidence that
financial assets are credit- impaired includes being overdue for more than 90 days or

indications that debtors are facing significant financial difficulties, breaches of contract, the
legal status, renegotiation of terms of payment or debt restructuring.

Installment sale receivables that have been renegotiated or modified the contractual cash
flows due to the borrower facing financial difficulties are considered to be financial assets with

a significant increase in credit risk or credit-impaired, unless there is an evidence that the risk
of not receiving contractual cash flows has reduced significantly and there are no other

indicators of impairment.

In subsequent periods, if the credit quality of financial assets improves and it is assessed that
there is no longer significant increase in credit risk from the initial recognition date that was

assessed in the previous period, the Company will change from recognising expected credit
loss over the expected lifetime to recognising the 12-month expected credit loss.

The expected credit loss is determined using probability of lifetime ECLs of financial assets
based on the present value of the cash flows expected not to be received. The Company

considers historical loss experience, adjusted with current observable data as well as forward
looking scenarios that is supportable and reasonable, provided it can be shown to be
statistically related. Making such estimates involves the appropriate exercise of judgement.

However, the Company has established a process to review, monitor the methodologies,
assumptions and forward-looking macroeconomic scenarios on a regular basis. In addition,

expected credit loss also include a management overlay.

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