CECL Solutions

  1. Ivan Cilik

    Ivan Cilik



  2. Kevin D. Schalk

    Kevin Schalk



Simplifying CECL with a flexible approach and full suite of services

Navigating the requirements of current expected credit losses (CECL) isn’t easy for most organizations because it’s complex and time-consuming. Baker Tilly advisors understand today’s regulatory hurdles and have the right methodology, technology and modeling experience to help clients not only achieve compliance, but to use their data to their strategic advantage.

Our solutions are tailored and customized … never cookie cutter

You deserve an advisor who listens. At Baker Tilly, that’s where we start. 

For the most critical of all your financial calculations, you can trust us — without worrying about augmenting your staff with hard-to-find data scientists who are well versed in the technology needed to get the job done. Our advisors have the deep regulatory knowledge to evaluate your portfolio and its risks, challenge assumptions and offer suggestions that align with your overall business strategy now, and for the future.

We’re responsive, data-savvy and deeply immersed in CECL modeling and experienced in CECL methodology options, implementation and validation. It’s a combination few others can match.

Going beyond the typical one-size-fits-all approach, we customize our offerings to keep you ahead of the game by providing the experience and tools you need to make the CECL transition more effective for your business.

Woman interacts with data on a screen

Your CECL questions - Answered

In preparation for the Jan. effective date, Baker Tilly wants to ensure that your questions about CECL continue to be answered.

On Nov. 15, 2019, the Financial Accounting Standards Board (FASB) updated the effective date of the current expected credit losses (CECL) standard for certain small public companies and other private companies. The revised effective dates of the standard they updated at that time are as follows.

SEC filers, excluding smaller reporting companies (SRCs): Fiscal years beginning after Dec. 15, 2019

All other entities, including SRCs: Fiscal years beginning after Dec. 15, 2022 (1)

For calendar-year entities, adoption would be required on Jan. 1, 2023.

The scope

The scope is broad and applies to many financial assets. The CECL methodology applies to the measurement of credit losses on financial assets measured at amortized cost, including:

  • Financing receivables
  • Held-to-maturity (HTM) debt securities
  • Receivables from revenue transactions within FASB Accounting Standards Codification (ASC) Topic No. 606, “Revenue from Contracts with Customers” or ASC 610, “Other Income”
  • Receivables from repurchase agreements and securities lending transactions
  • Reinsurance receivables

It also applies to off balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments, except for instruments within the scope of ASC 815, “Derivatives and Hedging”) and net investments in leases recognized by a lessor.

CECL implementation process

As the incurred loss model is being replaced with the CECL model requires advance planning to calculate allowance for loan and lease losses (ALLL) more efficiently. It also brings change for your data collection processes. Our experience and tools of understanding and implementing this standard — and the requirements and deadlines that go with it — allows us to help you plan for and implement its adoption in your accounting and financial reporting and data collection.

Model validation of CECL model or parallel run review

CECL is the largest accounting change the financial sector has seen in years. One of the biggest challenges is that it doesn’t have crystal-clear guidance. If you have already implemented/adopted CECL or currently running parallel runs of CECL model, you should consider having these CECL models independently reviewed and validated.

We’ve already helped a variety of banks and financial services companies confidently validate their CECL models. We can help yours, too.

Regulatory expectations

Baker Tilly model and credit risk professionals have a deep understanding of ALLL/CECL models, including:

  • Independent periodic model validation of CECL and other bank models (i.e. ALM/IRR, BSA/AML, liquidity, etc.)
  • 2001 and 2006 policy statement requirements
  • Prohibition of external auditors from performing under independence requirements (for institutions with more than $500 million in assets)