Kreditförlust

Kreditförlust, often translated as credit loss or loan loss, refers to the financial loss incurred by a lender when a borrower fails to repay a loan or debt. This can occur due to various reasons, including the borrower's insolvency, bankruptcy, or a general inability to meet their financial obligations. When a loan is considered to be in default, the lender may experience a partial or complete loss of the principal amount lent, as well as any accrued interest.

Financial institutions, such as banks and credit unions, are particularly exposed to credit losses. They manage this risk through various strategies, including thorough credit assessments of borrowers before approving loans, diversification of their loan portfolios, and the establishment of loan loss provisions. These provisions are funds set aside by the lender to cover potential future credit losses.

The recognition and measurement of credit losses are crucial aspects of accounting for financial instruments. International Financial Reporting Standards (IFRS) and generally accepted accounting principles (GAAP) provide frameworks for how these losses should be accounted for. Often, a distinction is made between expected credit losses (ECLs), which are forward-looking estimates of potential losses, and incurred credit losses, which are recognized once a loss event has occurred. Managing and mitigating credit losses is a fundamental component of sound financial management and risk assessment within the financial industry.