Settings

Tenant-wide configuration that applies to all users and calculations

Balance Basis

Ending Balance

Controls which quarter's balance is used as the denominator when calculating baseline loss rates. Applies to all BLR calculations across the tenant.

Ending Balance (default) Uses the balance at the end of each quarter as the denominator. Standard CECL convention — the period being measured.

Beginning Balance Uses the balance at the start of each quarter (i.e. prior quarter-end) as the denominator. May be required by certain model governance policies.

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Negative Loss Rate Treatment

Include in Average

Controls how to handle quarters where recoveries exceed charge-offs (negative loss rate) when calculating baseline loss rates. Applies to all BLR calculations across the tenant.

Include in Average (default) Keep negative rates as-is in the BLR calculation. Most conservative approach — periods of net recoveries reduce the overall baseline loss rate.

Floor at Zero Replace negative rates with 0% before averaging. Assumes that recovery-heavy quarters should not reduce the loss estimate, but are not excluded entirely.

Exclude from Average Omit quarters with negative rates from the numerator and denominator. BLR is averaged only over periods with positive loss rates.

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