CECL Policy Considerations
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Current Expected Credit Loss (CECL) is an accounting standard issued by the Financial Accounting Standards Board (FASB). The purpose of CECL is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. CECL achieves this by requiring consideration of a broader range of reasonable and supportable information to inform credit loss estimates.
In the current regulatory environment, it is important for financial services organizations to review their CECL policies to ensure they can be in a strong financial position in many different market environments. BAI constantly monitors regulatory updates, summarizes them, and provides organizations with actionable insights on what to prepare for. BAI has put together a document on CECL policy considerations to help financial services organizations know what they need to include in their policies to be compliant with CECL methodology and guidelines. Key components of the document include:
- A summary on CECL
- Who is affected
- Issues to be considered
- Reporting requirements
- And more
Looking to properly implement or update your company’s CECL policies? Download BAI’s: “CECL Policy Considerations.”