MAINTAINING VINTAGE LOSS RATE METHODOLOGY
CECL IMPLEMENTATION AND EARLY ADOPTERS The Financial Accounting Standards Board (FASB), in June 2016, issued the Accounting Standards Update (ASU) No. 2016-13, which introduced the Current Expected Credit Loss (CECL) model. The update moves the accounting for credit losses on various financial instruments to the Expected Credit Loss (ECL) model from the existing incurred loss […]
IDENTIFYING ISSUES – THE NEED TO STORE ALL DATA USED FOR ANALYSIS
HISTORICAL DATA AND CECL Most financial institutions have, by now, developed a Current Expected Credit Losses (CECL) implementation plan. If any institution is lacking a comprehensive historical data set, they need to start focusing on gathering data in order to use bottom-up historical loss data effectively in the future. Relevant historical loss data helps The […]
DATA AND ISSUES AROUND CREATING A SMOOTH, AUDITABLE PROCESS IN THE FUTURE
AUDITING CECL RESERVE CALCULATIONS The Financial Accounting Standards Board’s (FASB) new standard, the Current Expected Credit Loss (CECL) continues to be a challenge for independent auditors, financial statement preparers, and users. The metrics that companies traditionally used to estimate their future credit losses have undergone a paradigm shift with CECL. The previous method of loan […]
