CHICAGO (August 2, 2018) – A flash poll conducted by Baker Tilly Virchow Krause, LLP (Baker Tilly) indicates nearly 30 percent of depository and lending institutions are undecided about which methodology to use for implementation of the Financial Accounting Standards Board’s (FASB) Accounting Standard Update (ASU) 2016-13 Financial Instruments (Topic 326) – Measurement of Credit Losses on Financial Instruments. ASU 2016-13 is commonly referred to as the current expected credit loss (CECL) standard.
“Although the CECL effective date is over a year away, 2018 is when regulators will begin asking questions about the current state of financial institutions’ CECL implementation processes,” Ivan Cilik, CPA, partner in Baker Tilly’s financial services practice group, said.
“There are a variety of CECL models that institutions can use to achieve compliance, which is why regulators know that not every institution will be perfect come implementation date,” Matt Nitka, CPA, senior manager in Baker Tilly’s financial services practice group, said. “The key with implementation is to ensure your institution’s approach is reasonable and supportable, and that the methodology selection is completed in a good faith effort.”
Baker Tilly recently held an educational webinar CECL implementation: loan segmentation, to assist depository and lending industry professionals that are working to implement FASB’s CECL standard learn about loan portfolio segmentation.
The webinar presenters discussed:
Presentation slides and a recording of the webinar are available at bakertilly.com/insights/cecl-implementation-loan-segmentation.
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