[Verse 1] Balance sheets once whispered sweet illusions of the past Incurred loss models held their breath until defaults arrived at last But crystal balls shattered when the crisis came to call Now accountants peer through telescopes to catch the shadows before they fall [Chorus] Three stages dancing in the ledger's glow Twelve months or lifetime, watch the provisions grow Stage One sleeps easy, Stage Two starts to worry Stage Three screams bankruptcy in accounting fury IFRS Nine's telescope sees tomorrow's pain Expected credit losses falling like acid rain [Verse 2] Purchase date whispers your baseline probability tune Credit risk climbs mountains since that honeymoon Stage One: business as usual, twelve months in your sight Stage Two: significant increase, lifetime takes its bite [Chorus] Three stages dancing in the ledger's glow Twelve months or lifetime, watch the provisions grow Stage One sleeps easy, Stage Two starts to worry Stage Three screams bankruptcy in accounting fury IFRS Nine's telescope sees tomorrow's pain Expected credit losses falling like acid rain [Bridge] Probability weighted scenarios paint the future's face Default curves and recovery rates dancing through cyberspace Matrix methods, vintage aging, practical expedients too Forward-looking macroeconomic variables bleeding through [Verse 3] Thirty days past due might trigger staging elevation But rebuttable presumption saves from hasty calculation Credit-impaired securities purchased in their wounded state Lifetime losses from inception, sealed by accounting fate [Chorus] Three stages dancing in the ledger's glow Twelve months or lifetime, watch the provisions grow Stage One sleeps easy, Stage Two starts to worry Stage Three screams bankruptcy in accounting fury IFRS Nine's telescope sees tomorrow's pain Expected credit losses falling like acid rain [Outro] No more hindsight's comfortable embrace Expected losses show their weathered face Three stages echo through the financial night Tomorrow's defaults burning crystal bright
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