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A recent Abrigo seminar on the most recent information related to implementing the FASB's current expected credit loss model, or CECL, covered timelines for beginning preliminary calculations.

Regression analysis is a simple tool with direct applicability to the new current expected credit loss (CECL) model’s requirement to apply “reasonable and supportable” forecasts to reserve levels.

As institutions make strides to prepare their data for CECL, Garver Moore, director of special research for Abrigo Advisory Service Group, provides an overview of common data problems institutions face for the CECL transition and outlines immediate steps to ensure that information needed for CECL calculations is accessible and sound in time for implementation.

Vintage analysis is not overly complicated, but its expanded data retention and supporting factor requirements could necessitate changes to current workflows and practices.

In June, the accounting guidance for measuring expected credit losses was finalized, and institutions have since been trying to decipher its requirements and ramifications. Watch the replay of a webinar featuring Senior Risk Management Consultant Neekis Hammond as he unpacked initial and subsequent measures of loss under CECL methodology.

Given all the hype and media attention, it could be easy for bank and credit union management to turn to their attention away from the ALLL under GAAP today and focus on the expected loss models that the FASB outlined earlier this summer.
In the meantime, there are several quarterly or monthly calculations that have to be completed under current GAAP. And for the calculation today, a common hurdle institutions face is stating conservative reserve levels in light of very low losses.
This problem is compounded when comparing to peer experience. For example, when a peer group’s average Nonaccrual Loans to Total Loans is 10 times higher than a specific institution’s, how can that bank justify a reserve that’s reflective of their actual losses?

The FASB finalized their accounting standard for calculating current expected losses, and for many institutions, there is a waiting period before the model has to be implemented. Banks and credit unions were polled to see when they expect the current expected credit loss model (CECL) to become reality at their institution. And they aren't all waiting until 2021...

In a webinar hosted by publisher American Banker and sponsored by Abrigo, members of the FASB presented some of the realities of CECL.

The Financial Accounting Standards Board (FASB) has issued its final guidance on the new current expected credit loss (CECL) model. Here are the details.

Financial institutions are closer to getting their first look at the FASB's final guidance on the new CECL model. The long-awaited release, expected in June, will mark a major step in the multi-year development of the updated approach to the ALLL.

On April 27th, FASB continued with deliberations on CECL. This meeting came with marked progress by the board and signaled to the industry a commitment to release the finalized CECL model in June. The meeting included a review of costs and benefits, a change in effective dates and an update to vintage disclosure requirements.

The Transition Resource Group (TRG) held their initial meeting on April 1, where they discussed a revised proposal for the upcoming CECL standard.