Why this is mistaken
Estimate lifetime contractual cash shortfalls for the scoped population using relevant evidence; do not wait for a customer-specific probable-loss trigger.
Where to watch
When this mistake may appear
- No customer is likely to default.
- The invoices are current.
Check your work
Your work may contain this mistake if:
- Reserves only identified defaults.
- Omits expected loss on current pooled assets.
- Uses an incurred-loss trigger from memory.