Alll Insider Articles
ALLL Insiders are bankers, consultants, credit union professionals, accountants and others who have extensive knowledge in the ALLL calculation. The below articles comprise these experts' recommendations and opinions on various components of the allowance calculation.
- Oct 20, 2017
CECL: A CEO’s role in improved management of credit losses
There is a reason regulatory agencies are directing their guidance on the new current expected credit loss (CECL) model to the attention of financial institution CEOs. After all, it is top management’s responsibility at the end of the day to ensure the allowance for loan and lease losses (ALLL) is adequate.
- Sep 21, 2017
Top Fed staff hosting CECL informational session Oct. 3
The top accountant for the Federal Reserve’s Board of Governors and other Fed staff will host an informational session Oct. 3 to discuss the Financial Accounting Standard Board’s updated credit-loss standard, also known as the current expected credit loss (CECL) model.
- Sep 7, 2017
Regulators offer new round of answers to FAQs about CECL
In a new round of answers to Frequently Asked Questions, or FAQs, regulators addressed initial supervisory views on qualitative factors, data needs and other topics related to (ASU) No. 2016-13, Topic 326, Financial Instruments – Credit Losses, which takes effect as early as 2020 for SEC-registered financial institutions.
- Aug 25, 2017
CECL Forecasting: How far into the future is far enough?
A hallmark of the Financial Accounting Standards Board’s shift from the incurred to current expected credit loss model, or CECL, is that banks and credit unions will begin estimating credit losses for the entire life of the loan, instead of just what has already been incurred as of the calculation date.
- Jul 18, 2017
Data: A Hurdle For CECL
Due to the shift from an incurred to current expected credit loss model (CECL), Sageworks clients have been advised to start working on loan-level data collection now as a first step toward being compliant under future GAAP. However, many banks are unsure of what data they have, which fields they need to start tracking and how to store the amount of data necessary for CECL.
- Apr 1, 2017
The Case for Early Adoption of the FASB’s Current Expected Credit Loss (CECL) Model
The standard, issued in ASU 326 (Financial Instruments – Credit Losses) in June of 2016, contains several timelines for required adoption of the standard depending on the type and existing reporting requirements of the financial institution. While the timelines are (directly) independent of institutional size and complexity, all financial institutions do have one thing in common: For fiscal periods beginning after December 15, 2018, and for interim periods within those years, use of the CECL standard is permitted.
- Jan 19, 2017
Other Regulatory Considerations for CECL Preparation
On December 19, 2016, the Board of Governors of the Federal Reserve System (the Fed), Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corp. (FDIC), and National Credit Union Administration (NCUA) issued an 18-page, 23-question statement titled, “Frequently Asked Questions (FAQs) on the New Accounting Standard on Financial Instruments – Credit Losses,”
- Sep 22, 2016
CECL is here – Answering your common questions
For financial services companies, June 2016 was a major milestone with the FASB’s issuance of the new accounting standard for loan losses and held-to-maturity debt securities. Designated the current expected credit loss model (CECL), the standard requires entities to record credit losses at origination based on a life of loan loss concept. This is an extensive, impactful change in accounting guidance, which brings significant questions regarding interpretations, implementation and challenges financial services professionals and others are facing.
- Aug 12, 2016
Making sense of CECL
In a July 2016 webinar with more than 220 bankers attending, executives at banks and credit unions spoke up with some of their most pressing questions related to the implementation of the current expected credit loss (CECL) model. Neekis Hammond CPA and senior risk management consultant at Sageworks addressed some of the questions during the webinar and archived the responses below for the ALLL.com audience.
- Jun 1, 2016
Don’t panic about upcoming accounting change
Bankers shouldn't panic about the upcoming CECL standard. What financial institutions can do now is take measured steps to examine their current calculation processes and to communicate with their boards so that institutional panic doesn’t snowball.