TALES FROM THE FRONTLINE OF CECL IMPLEMENTATION – PART 3
LEARNING LESSONS FROM CECL IMPLEMENTATIONS INTRODUCTION Welcome to the third CECL Express e-book! 2022 was a year of systemic design, decision making and testing for America’s community banks and credit unions. Now that CECL is finally here, the chosen approaches will be road tested through audits and bank exams. The context is important. CECL was […]
IMPLEMENTING CECL QUICKLY
CECL Implementation After the financial crisis of 2008, it was widely agreed that it had been aggravated by the incurred loss methodology existing then, which delayed the recognition of credit losses. The Financial Accounting Standards Board (FASB) worked along with the International Accounting Standards Board (IASB) to come up with a forward-looking way of measuring […]
TALES FROM THE FRONTLINE OF CECL IMPLEMENTATION – PART 2
LEARNING LESSONS FROM CECL IMPLEMENTATIONS INTRODUCTION More Lessons from the CECL front line In the last e-book, we collected the first set of articles based on our experiences of implementing CECL at smaller banks and credit unions. This e-book continues in that vein, with a greater focus on implementation choices made as part of those […]
TALES FROM THE FRONTLINE OF CECL IMPLEMENTATION – PART 1
LEARNING LESSONS FROM CECL IMPLEMENTATIONS INTRODUCTION CECL is now a reality for all banks and credit unions in the United States. Whether those institutions are designing, building, or testing ECL systems or deciding between competing third-party providers, the January 1 deadline looms large. Most accounting standards apply equally to banks and credit unions, both in […]
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 […]
IDENTIFYING ISSUES – HISTORIC COMPARISONS BETWEEN REPORTING PERIODS
CECL IMPLEMENTATION In June 2016, the Financial Accounting Standards Board (FASB) issued the Current Expected Credit Losses (CECL) accounting standard. CECL focuses on estimating expected losses over the life of the loan. CECL’s effective date has been rescheduled from January 2022 to January 2023 for non-public companies, and from January 2021 to January 2023 for […]
