If we look at just retail products, then the credit union would need to consider all of the following:
While a simple approach might be to define default as the failure to meet a scheduled payment, the definition that the credit union uses must also consider qualitative factors such as breach of covenants. Inability to pay may also be considered in making the qualitative assessment of default.
IFRS 9 provides a rebuttable presumption that default occurs once a loan is more than 90 days past due. This can be rebutted if the credit union has supportable evidence to the contrary.
In respect of forward looking information, IFRS 9 does not prescribe the number of factors that must be taken into account, but it does provide examples of potential data sources.
These potential sources include:
Factors credit unions would need to consider include forecasts of: