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# Discount factor EAD

<table><tr><th>Description</th><td>Supervisory discount factor for exposures at default</td></tr><tr><th>Reference</th><td><a href="https://www.bis.org/basel_framework/chapter/MAR/50.htm?inforce=20230101&published=20200708#paragraph_MAR_50_20230101_50_15">\[MAR50.15]</a></td></tr><tr><th>Notation</th><td>$DF_c$</td></tr><tr><th>Formula</th><td>$DF = 1 \text{ if EAD was computed under IMM else } DF = \frac{1 - e^{-0.05 \cdot M}}{0.05 \cdot M}$ </td></tr></table>

We recommend displaying hierarchy [\[TradePosition\].\[Netting Sets\]](./tradeposition.netting-sets) to display discount factors applied to exposures at default.

## See also

* [Exposures at default](../input-files/exposures-at-default)
* [\[TradePosition\].\[UnderIMM\]](./tradeposition.underimm)