FASB meeting: New disclosure requirements related to gross write-offs and recoveries
The Financial Accounting Standards Board (FASB) met today to discuss the current expected credit loss (CECL) accounting standard and expand on implementation issues brought up in the transition resource group meeting in June. The purpose of the transition resource group is to discuss stakeholders’ issues about CECL, to inform the board of the issues, and to provide a forum for stakeholders to learn about implementation experiences of others.
CECL survey: Most bankers to use 3rd-party vendors, advisors for CECL
A majority of bankers expect their financial institutions to use third-party vendors or a combination of advisors and third-party vendors to help implement the current expected credit loss model, or CECL, according to an informal poll released by Sageworks and MST.
Large banks push for a CECL extension
The Bank Policy Institute (BPI), an organization conducting research and advocacy on behalf of America's leading banks, recently wrote a letter to the chairman of the Financial Stability Oversight Council (FSOC), Stevin Mnuchin, with a request to review the risks associated with the implementation of the new current expected credit loss (CECL) model.
CECL webinar panel: Answers to your top questions
The transition to the FASB’s CECL accounting standard is well underway for many financial institutions. In this panel discussion, hear from a banker, three auditors and two consultants from Sageworks, MST, Grant Thornton, BKD, Camden National Bank and PWC who are helping thousands of institutions through this critical change.
What one bank views as the key decisions ahead of CECL
Financial institutions across the U.S. are grappling with the many changes that will be required as they implement the CECL standard. In fact, some are so overwhelmed that they succumb to "CECL paralysis," or a lack of action, Sageworks analysts have noted. In order to get moving, it can be helpful for financial institutions to understand how others have approached CECL implementation and what key decisions they have tackled early on in the CECL process.
Latest
FASB meeting: New disclosure requirements related to gross write-offs and recoveries
The Financial Accounting Standards Board (FASB) met today to discuss the current expected credit loss (CECL) accounting standard and expand on implementation issues brought up in the transition resource group meeting in June. The purpose of the transition resource group is to discuss stakeholders’ issues about CECL, to inform the board of the issues, and to provide a forum for stakeholders to learn about implementation experiences of others.
CECL survey: Most bankers to use 3rd-party vendors, advisors for CECL
A majority of bankers expect their financial institutions to use third-party vendors or a combination of advisors and third-party vendors to help implement the current expected credit loss model, or CECL, according to an informal poll released by Sageworks and MST.
Large banks push for a CECL extension
The Bank Policy Institute (BPI), an organization conducting research and advocacy on behalf of America's leading banks, recently wrote a letter to the chairman of the Financial Stability Oversight Council (FSOC), Stevin Mnuchin, with a request to review the risks associated with the implementation of the new current expected credit loss (CECL) model.
CECL webinar panel: Answers to your top questions
The transition to the FASB’s CECL accounting standard is well underway for many financial institutions. In this panel discussion, hear from a banker, three auditors and two consultants from Sageworks, MST, Grant Thornton, BKD, Camden National Bank and PWC who are helping thousands of institutions through this critical change.
What one bank views as the key decisions ahead of CECL
Financial institutions across the U.S. are grappling with the many changes that will be required as they implement the CECL standard. In fact, some are so overwhelmed that they succumb to "CECL paralysis," or a lack of action, Sageworks analysts have noted. In order to get moving, it can be helpful for financial institutions to understand how others have approached CECL implementation and what key decisions they have tackled early on in the CECL process.
Poll
What type of data do you anticipate leveraging for your CECL calculation?
Tip Of The Day
If you are considering a vendor for the ALLL, develop a checklist. Is it robust enough to handle all your needs? Is it flexible enough to be future-proofed?
Alll Insiders
CFO Corner -- “ALLL” about CECL
In this occasional feature, CFOs from financial institutions share their approaches to the ALLL and to the CECL transition, as well as advice for keeping the board informed about related matters. Here, Ronald S. Ohsberg, Senior Executive Vice President, Chief Financial Officer and Treasurer of The Washington Trust Company shares advice from his institution.
The biggest initial impact of CECL on financial institutions
Most financial institutions understand CECL, and more specifically applying the CECL model to their loan portfolio, represents the most significant accounting change for financial institutions in recent memory. However, there is less comfort over how the standard will specifically affect each institution.
Validating ALLL models under CECL – What might change?
What does model validation mean for the allowance for loan and lease losses and what will it mean under CECL?
Resources
Navigating Loan Segmentation under CECL
Proper loan pool segmentation, already a critical issue in the incurred-loss method of calculating the allowance for loan and leases losses (ALLL), is expected to have even more importance under the current expected credit loss model (CECL). Various methodologies for forecasting expected credit losses will require specific kinds of segmentation in order to execute them.
Join Sageworks Executive Risk Management Consultant Rob Ashbaugh as he discusses how to revisit loan pools for ALLL calculations under CECL.
Whitepaper: CECL and DFAST, Accounting versus Simulation
Learn about a case study referencing the symmetry and critical differences between the new current expected credit loss model for estimating credit losses (CECL) and the Dodd-Frank Wall Street Reform and Consumer Protection Act’s stress-testing (DFAST) requirements.
Although there is no guidance or statutory relationship between CECL and DFAST, their similarities in data requirements and forward-looking projection suggest benefits for financial institutions by coordinating the necessary data management and governance components of their CECL and DFAST initiatives.
Webinar: CECL for Community Banks, The Practical Path
In this webinar, Sageworks Executive Risk Management Consultant Tim McPeak discussed how as the transition to CECL moves closer, many smaller financial institutions have started to grapple with how to apply the new standard to their ALLL process in a practical way. He followed up on some of the questions and methods presented during the February regulatory webinar and focused on the key elements of the standard financial institutions need to consider as they plan their path forward. Specific topics included portfolio segmentation, available loss rate methods, qualitative factors, and forecasts.
Whitepaper: CECL Action Plans for Community Banks
Community banks are heeding the advice of the FASB, which have directed banks to take advanced
steps to ensure effective implementation of this major change in estimating losses. implementation efforts. This whitepaper outlines five practical steps that banks can take to prepare for CECL:
1. Coordinate with other departments
2. Understand loan level data collection requirements
3. Identify new procedures and changes to current procedures
4. Make a decision on building vs. buying a solution
5. Communicate with auditors and regulators