FASB seeks comments on proposed CECL updates on accrued interest, recoveries, prepayments
Financial institutions and other parties interested in the current expected credit loss model, or CECL, have until Dec. 19 to comment on FASB's proposals to update its guidance for accounting for credit losses.
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.
Latest
FASB seeks comments on proposed CECL updates on accrued interest, recoveries, prepayments
Financial institutions and other parties interested in the current expected credit loss model, or CECL, have until Dec. 19 to comment on FASB's proposals to update its guidance for accounting for credit losses.
Subjective CECL Qualitative Adjustments and Forecasts Under the CECL Model
As institutions approach the transition from the incurred loss model to the current expected credit loss model for estimating the ALLL, there are many questions around the subjective aspects of the new standard. This session will look at the relationship between qualitative adjustments and “reasonable and supportable” forecasts under CECL estimates and key considerations for how institutions will apply them.
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.
Poll
What type of data do you anticipate leveraging for your CECL calculation?
Tip Of The Day
Are your key data points for qualitative factors consistent? Use the same data components each period to ensure directional consistency.
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
Streamlining the New Fair Value Disclosure Requirement
A new Financial Accounting Standards Board (FASB) disclosure requirement makes several material changes to the U.S. generally accepted accounting principles (GAAP). Among the changes are new requirements for determining the fair value disclosure of financial institutions’ loan portfolios.
(ASU) 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, went into effect for financial statements beginning after 12/31/17. The update requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes in accordance with Topic 820.
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.