Significant Increase in Credit Risk (‘SICR’) CFSL monitors all financial assets that are subject to impairment requirements to assess whether there has been a significant increase in credit risk since initial recognition. If credit risk has significantly increased, the loss allowance will be measured based on lifetime rather than 12-month ECLs. In making this assessment, Cim Finance considers both quantitative and qualitative information that is reasonable and supportable. This includes historical experience, expert credit assessment, and forward-looking information, ensuring that the process is based on available information without undue cost or effort. At each reporting date, Cim assesses whether the credit risk of a financial asset has increased significantly since its initial recognition, following these steps: (i) A 30-day past due backstop criterion is used as an indicator of Significant Increase in Credit Risk (SICR) (ii) The risk of a default is compared at the reporting date based on the remaining maturity of the asset, relative to the risk of default anticipated when the financial asset was first recognised. (iii) If an asset is considered ‘low risk’ at the reporting date, the Company may assume that it is not subject to SICR. (iv) In addition to the above, other qualitative factors showing early signs of warning are considered. Risk Management Report (continued) 90
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