Financial Services Reporting
Stage 1 refers to the classification of financial assets that have not experienced a significant increase in credit risk since initial recognition. These assets are considered to be performing, meaning they are expected to meet their contractual cash flow obligations. In this context, financial institutions are required to recognize a 12-month expected credit loss for these assets, which reflects the likelihood of default occurring within the next year.
congrats on reading the definition of stage 1. now let's actually learn it.