CECL: Synthesizing Complexities to a Board
The current expected credit loss standard, or CECL, has been called one of the biggest changes ever to accounting for financial institutions, and every bank and credit union in the U.S. must assess CECL’s impact on its processes and on the allowance. With the change comes new roadblocks, one of which is explaining the complexities of CECL to a board in a straight-forward and clear manner.
When the conversation switches from an accounting employee’s desk to the boardroom, the focus should be less on data, segmentation, and methodologies and more on the predicted impact on financial statements. Employees who are responsible for building out CECL calculations may appear to be speaking a different language than the high-level board members who care less about minute details associated with the accounting for credit losses (ACL).
Join to learn:
- What different members of the board care about
- How to address early questions from board members on anticipated reserve levels under CECL
- How to explain high-impact/complex CECL challenges in a simple manner
- Why CECL may cause irregularities in both earnings and capital
- Strategies to reduce potential negative impact on earnings