TRANSITIONING TO CURRENT EXPECTED CREDIT LOSS (CECL)

In 2016, FASB introduced Accounting Standards Update (ASU) No. 2016-13 Financial Instruments – Credit Losses (Topic 326) that shifts the basis of the loss allowance accounting framework from incurred credit losses to Current Expected Credit Loss (CECL). This transition to CECL will impact institutions’ financial results and have major implications on data, modeling, and analytics requirements. Further, it will result in a fundamental re-evaluation of portfolio composition and business strategy.

FI has deep experience helping financial institutions assess, develop, and enhance their loss reserve processes end-to-end. We have helped commercial institutions establish incurred loss approaches and are the leading provider of expected credit loss modeling and analytical support to the federal government. FI sources and validates data, builds models, develops supporting analytics and documentation, and interfaces with internal stakeholders and auditors. We help our clients develop reserve estimates that are explainable, reflective of portfolio characteristics and the economy, and well-controlled. Our loss reserve experience spans numerous asset classes and we’ve worked through all phases of the economic cycle.

To read more about the impact of CECL, download FI Consulting’s presentation given at the MBA’s Accounting and Financial Management conference.

To learn more about FI Consulting’s implementation approach, please download our CECL capabilities statement.

VIEW LOSS ALLOWANCE CASE STUDIES