FlexFinance maps the credit risks for all three stages of impairment in accordance with IFRS 9. The functions are provided by components in a modular architecture. If all components are used, an end-to-end solution develops that covers the calculation of collective probability of default, the valuation of individual deals and the mapping of credit risks for reporting purposes. Depending on credit quality, credit risks are mapped, in line with accounting procedure, via specific impairment, lump-sum specific impairment or collective impairment.

Financial assets can be allocated to one stage and credit quality assessed automatically if requested and according to rules that can be configured. Even if allocation is implemented manually, the transfer of the book values between the stages over a period of time can be traced.

FlexFinance provides alternative models for calculating the expected credit losses, depending on the stage, the portfolio and the information available on default. These models come as encapsulated components that can be exchanged and adjusted to meet individual requirements. “When a potential loan default is calculated, macroeconomic parameters in the form of scenarios, which allow a risk provision to be analysed on a "point-in-time" basis, are considered.

A workbench, which assists the capture, monitoring and correction of the expected cash flows from non-performing financial assets, is available for the individual risk provisions needed for stage 3. Intra and inter-departmental processes are digitalised by the Impairment Workbench and thus made more transparent and traceable