FIN.17:4.6 - Test the changed path at the point where it could fail

Choose checks from the financial consequence of the update. If collection moves after repayment, inspect the cash available just before repayment and the actual replacement finance. If the value crosses the purchase threshold, check the changed cash, risk basis and relevant alternative. If an agreement changes a draw limit, recompute that limit from its actual definitions before using the facility. A balanced spreadsheet alone establishes none of those external conditions.

For an implemented model, check that the changed source reaches the intended outputs. A stale imported value, a formula overwritten by a constant or a calculation mode that leaves results unchanged can defeat an otherwise correct financial method. Compare the result with an independent small calculation or an expected limiting case where that can expose the defect. A suitable reviewer may be needed for a consequential complex model; the scale of checking should follow the reliance and uncertainty.

Preserve useful earlier checks when their predicates and inputs are unaffected. Test the changed relation and the consumers that depend on it instead of rebuilding an unrelated valuation. For coupled changes, checking each altered cell alone is insufficient: their combination can create a funding gap or violate an assumption even though each isolated change appears acceptable.

If a check fails, distinguish an implementation error, an inadequate method and an adverse financial conclusion. Repair the implementation through the model’s normal controls. Return an inadequate method to FIN.18. Carry an adverse but correctly computed result to FIN.16 or the relevant financial decision. These returns prevent “fixing the model” from becoming an instruction to restore the earlier preferred answer.