The guidance requires institutions to estimate an expected lifetime credit loss on financial assets ranging from short-term trade accounts receivable to long-term financings measured at amortized cost. While estimating lifetime losses, all available and relevant information about past events, current conditions, and reasonable and supportable forecasts should be considered.

Unlike the incurred loss models in existing U.S. GAAP, the CECL model does not specify a threshold for recognizing an impairment allowance. Rather, an entity will recognize its estimate of expected credit losses for financial assets from the day they go on the balance sheet (or an off-balance sheet arrangement is entered into). Credit impairment will be recognized as an allowance — or contra-asset — to the amortized cost basis of the asset

Learning Objectives: 

• Understand the new CECL guidance and how it impacts your institution
• Best practices and lessons learned from implementing CECL
• After-effects of CECL implementation
• How to handle unexpected economic shifts in future quarters

Specific Areas Covered:

• Overview of CECL
• Impact of CECL Implementation
• CECL Post-Implementation 
• CECL Financial Reporting

Bonus Takeaway Checklist

•  CECL Post-Implementation 6 areas of focus (Model Validation, Prepayments, Qualitative Adjustments, Off-Balance Sheet Reserves, AFS Securities, Data Cleanup and Governance/Documentation)