Document ID: chunk:federal_register_of_legislation:F2022L01576:body:0:p16
Version: federal_register_of_legislation:F2022L01576
Segment Type: other
Provision Reference: 
Character Range: 43074–46137

treated as non-performing at the time of restructure, had the restructure not been granted, the new exposure must be treated as non-performing.
100.     An ADI must monitor the appropriate categorisation of exposures on which restructure has been granted more than once. When a restructured exposure under the probation period is granted new forbearance, this must trigger a restart of the probation period.
101.     The continuous repayment period for non-performing exposures and the probation period for restructured exposures may run concurrently. Non-performing exposures that are restructured must continue to be classified as non-performing until they meet the criteria in paragraph 95. When a restructured exposure becomes non-performing during the probation period, the probation period must start again.
102.     An exposure that is not subject to the National Credit Code[7] need not be reported as restructured where it is placed on restructured terms for less than twelve months due to financial difficulty being experienced by the borrower but where long-term viability is unquestioned (e.g. an agricultural exposure encountering a bad season). The ADI must, however, be reasonably confident that the borrower is able to fully perform with no loss of principal and the originally contracted amount of interest or other payments due, and the ADI must not maintain any provisions assessed against the exposure on an individual basis.

Criteria for exit from the restructured exposures category
103.     An ADI must classify a restructured exposure as such until it meets both of the following exit criteria:
       (a)          when all payments, as per the revised contractual terms, have been made in a timely manner over a continuous repayment period of not less than six months (probation period). The starting date of the probation period must be the scheduled start of payments under the revised terms; and
       (b)          the borrower has resolved its financial difficulty.

Credit risk and accounting for expected credit losses
104.     An ADI must adopt, document and adhere to sound methodologies that address policies, processes and controls for assessing and measuring credit losses on all exposures. The measurement of provisions must build on robust methodologies and result in the appropriate and timely recognition of expected credit losses in accordance with Australian Accounting Standards.
105.     An ADI's aggregate amount of provisions must be adequate and consistent with the objectives of Australian Accounting Standards.
106.     An ADI must have sound policies and processes in place to appropriately validate models used to assess and measure expected credit losses.
107.     An ADI must use experienced credit judgement, particularly in the robust consideration of reasonable and supportable forward-looking information, including macroeconomic factors, in its assessment and measurement of expected credit losses.
108.     An ADI must have an appropriate credit risk assessment and measurement process that provides it