GRAP 104 IMPLEMENTATION

Our implementation project provides the following:

Data Profiling and Portfolio Segmentation

We perform detailed data profiling and segmentation across various financial assets to identify portfolios with similar credit risk characteristics.

This process includes:

  • Data quality assessment
  • Historical trend analysis
  • Customer classification
  • Portfolio segmentation
  • Identification of risk drivers
  • Credit characteristic grouping

Proper segmentation ensures more accurate and defensible impairment calculations.

Expected Credit Loss (ECL) Tool Deployment

We deploy a municipality-owned Excel-based Expected Credit Loss model that automates impairment calculations.

The solution includes:

  • Embedded actuarial modelling
  • Statistical analysis capabilities
  • Forward-looking macroeconomic forecasting
  • Automated impairment calculations
  • Audit-ready calculation methodology
  • User-controlled and transparent outputs

The model automatically calculates:

  • Probability of Default (PD)
  • Loss Given Default (LGD)
  • Exposure at Default (EAD)

for both General and Simplified approaches.

Embedded Macroeconomic Forecasting

GRAP 104 requires impairment estimates to consider future economic conditions.

Our modelling framework incorporates:

  • Forward-looking information
  • Economic scenario modelling
  • Inflation assumptions
  • Growth indicators
  • Municipal-specific risk factors
  • Probability-weighted economic scenarios

This ensures impairment estimates remain compliant with the standard’s forward-looking requirements.

Debt Impairment Policy Amendments

We review and update debt impairment policies to align with GRAP 104 requirements and implementation outcomes.

Updates typically include:

  • ECL methodology documentation
  • Portfolio treatment approaches
  • Risk assessment procedures
  • Write-off considerations
  • Governance requirements

Credit Control Policy Amendments

We assist with revising credit control policies to ensure alignment with the assumptions and outputs used in the Expected Credit Loss process.

This includes:

  • Collection procedures
  • Risk management considerations
  • Default definitions
  • Recovery processes
  • Governance enhancements

Accounting Policy Updates

We provide updates to accounting policies to ensure consistency with:

  • GRAP 104 requirements
  • ECL methodologies
  • Recognition and measurement principles
  • Impairment disclosures

Disclosure Support

We prepare disclosure information aligned to GRAP requirements and the latest CaseWare reporting templates.

This includes:

  • Impairment note disclosures
  • Methodology narratives
  • Risk analysis schedules
  • Reconciliation templates
  • Assumption documentation