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  • CECL for non-banks: What to expect

    With almost a year until some public business entities must begin complying with the current expected credit loss (CECL) standard, banks and credit unions have been fervently beginning transition practices, and their preparations have taken center stage in regulatory and financial news. However, a topic less prevalent amidst current CECL…
  • Will a decade of increasing qualitative adjustments come to an end under CECL?

    Qualitative adjustments, otherwise known as Q factors, have been steadily increasing in influence on the reserves held for pooled loans since the end of the recession, and their role in estimating the allowance may change yet again under the current expected credit loss model, or CECL. During a recent webinar…
  • CECL paralysis: How to avoid common implementation hurdles

    Financial institutions across the U.S. are grappling with the many changes that will be required to implement the current expected credit loss, or CECL, model. With the extensive amount of time, resources and staff required to successfully transition from the incurred loss model, even getting started can be daunting. During…
  • Survey: Most banks are collecting, analyzing CECL data

    Community bankers in the throes of implementing the current expected credit loss model, or CECL, are generally collecting and analyzing data at this point in the process, according to a new survey on banks' CECL status. Learn more about navigating the CECL transition. Request More Information » In the 2018…
  • The different use cases for CECL methodologies

    Financial institutions are currently planning and building models for the quickly approaching implementation of the current expected credit loss standard, or CECL. The accounting change brings many concerns surrounding implementation dates, modeling, qualitative factors, economic forecasting and documentation/reporting. More specifically, many bank and credit union managers and executives think that…
  • 4 ways to help investors understand the CECL transition: Disclosure tips

    As Securities and Exchange Commission (SEC) filers prepare to meet the deadline to implement the FASB’s current expected credit loss model, or CECL, for fiscal years beginning after Dec. 1, 2019, SEC registrants are weighing what CECL transition disclosures to provide about the new standard and its expected impact. Some…
  • CECL and IFRS 9: How are they different?

    Financial institutions around the world are revising how they estimate credit losses, but institutions subject to the International Accounting Standards Board (IASB) standards have gotten a head start on those that will follow the U.S. Financial Accounting Standards Board’s current expected credit loss model, or CECL. Earlier effective dates of…
  • FASB proposed CECL extension: The true impact

    The Financial Accounting Standards Board (FASB) recently introduced a proposal to allow calendar year-end non-public business entities (PBEs) to report reserve levels in accordance with the new current expected credit loss (CECL) standard on Mar. 31, 2022, instead of the initial reporting date of Dec. 31, 2021. This was initially…
  • Why data is such a large concern for credit unions preparing for CECL

    As many credit unions begin to brace for the impact that the current expected credit loss (CECL) model may have on their institution, several are faced with key data challenges. CECL is a change in the FASB’s Accounting Standards, and all credit unions will be required to transition by the end…
  • How one community bank's ALLL calculation went from a week to 30 minutes

    One question frequently asked about the new current expected credit loss model (CECL) is, “Can we do this on our own?” Potential options are to build a system internally or partner with an outside vendor like Sageworks. For smaller community banks and credit unions, a common consideration is to…
  • CECL transition workshops: Hands-on practice for upcoming ALLL changes

    Training for the current expected credit loss model, or CECL, is available for bankers and others preparing for the transition to the FASB’s updated accounting standard. Given the nature and complexity of the CECL model and the variable nature of financial institutions’ loan portfolios and potential losses, implementation will vary…
  • How are your peers preparing for CECL?

    As financial institutions lay the groundwork for transitioning to the current expected credit loss model, or CECL, many are curious about how peers are preparing for CECL and where they are in tackling what’s considered the biggest accounting change in banking history. After all, the FASB’s guidance on CECL is…
  • Why choosing the right loss rate methodologies is the largest CECL concern

    In a recent Sageworks webinar focused on loan pool segmentation, bank and credit union managers and executives were asked what their largest concern is in 2018 regarding the accounting standard transition from the incurred loss to the current expected credit loss model (CECL). 60% of respondents said finding the right…
  • Regulatory agencies approve new CECL proposal

    On Friday, April 13, the federal banking agencies jointly issued a Notice of Proposed Rulemaking to amend their capital rules in response to “the biggest change yet” to bank accounting principles set forth in Accounting Standards Update ASU 2016-13, otherwise known as the current expected credit losses model, or CECL. The notice…
  • Top five resources for CECL and navigating the transition in 2018

    The Current Expected Credit Loss (CECL) model, otherwise known as the “biggest change to bank accounting yet”, goes into effect in 2020 for banks that file with the Securities and Exchange Commission (SEC) filers and in 2021 for all other financial institutions. The change impacts all financial institutions, including community…
  • Loan pool segmentation: Standing pat or making changes for CECL?

    Proper loan pool segmentation, already a critical issue in the incurred-loss method of calculating the allowance for loan and leases losses (ALLL), is expected to have even more importance under the current expected credit loss model, or CECL. Various methodologies for forecasting expected credit losses will require specific kinds of…
  • CECL for community banks: The practical path recap

    Sageworks Senior Consultant Tim McPeak and Implementation Consultant Danny Sharman recently shared practical tips for community banks facing the CECL transition. The session included a good overview of CECL expectations and followed up on points discussed in an earlier regulatory webinar. Approaches All banks, including small, non-complex community banks, will…
  • Publicly traded banks disclose CECL progress, expected impact

    As financial institutions plan for their respective deadlines to implement the new current expected credit loss (CECL) model, they are also weighing how to disclose the potential financial impacts and how to keep stakeholders informed along the way. A study of recent SEC filings finds that publicly traded financial institutions…
  • With or without external advisors, CECL transition is achievable

    During the transition to the FASB’s current expected credit loss (CECL) model, some financial institutions are developing their own needs-based approaches to methodology, segmentation and other elections. Others are partnering with service providers to help develop the framework for a CECL transition rather than managing the effort solo. Many of…