Remaining Life – A Viable CECL Methodology for Some Financial Institutions
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. However, with the Q1 2020 compliance date for SEC-registered institutions quickly approaching, a majority of financial institutions haven’t yet begun testing CECL-compliant methodologies, according to the 2019 Abrigo Lender Survey.
One of the challenges is that many community financial institutions are looking for simpler, more practical methodologies for implementing CECL than those being used by larger, more complex banks and credit unions. This whitepaper explores one methodology that represents a streamlined option for some financial institutions to implement the new standard for accounting for credit losses.
Download the paper to learn:
- A history of the “remaining life” methodology and CECL
- Why financial institutions are seeking out simple, practical methods
- How and when to use a remaining life calculation