explain 30 day rebuttable presumption ifrs 9

​The 30-day rebuttable presumption under IFRS 9 is a specific provision related to the assessment of credit risk and the calculation of Expected Credit Losses (ECL). Under IFRS 9, financial assets are categorized into one of three stages for impairment assessment:

1. **Stage 1**: When financial assets are initially recognized, they are considered to have not experienced a significant increase in credit risk since origination. They are subject to a 12-month ECL assessment.

2. **Stage 2**: If the credit risk on a financial asset increases significantly since initial recognition (but it is not credit-impaired), it moves to Stage 2. Here, the ECL is calculated over the lifetime of the asset.

3. **Stage 3**: If the financial asset becomes credit-impaired, it is moved to Stage 3, where lifetime ECLs are also recognized.

The 30-day rebuttable presumption is particularly relevant for the transition between Stage 1 and Stage 2. IFRS 9 presumes that if a financial asset is more than 30 days past due, it has experienced a significant increase in credit risk and therefore should be moved to Stage 2. This presumption is based on the idea that as a borrower becomes increasingly overdue on their payments, the risk of default rises.

However, this presumption is "rebuttable," meaning that an entity can provide information to argue against this automatic reclassification. If an entity has reasonable and supportable information, including forward-looking data, that indicates that the credit risk on the specific asset has not increased significantly despite being past due over 30 days, it can keep the asset in Stage 1.

This provision allows for flexibility in the assessment of credit risk, acknowledging that late payments do not always equate to a significant increase in credit risk. For example, a temporary delay in payment due to administrative issues may not necessarily indicate a higher risk of default. Entities are expected to use their judgment and available information to make these determinations.