Concentration of Credit Risk Definition | Becker
Accounting Dictionary
Concentration of Credit Risk
Credit risk is the risk that the other party to a transaction (counterparty) will partially or completely fail to perform. A concentration of credit risk exists if a number of counterparties are engaged in similar activities and have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions. Concentrations of credit risk are disclosed. See also market risk.