CECL and Technology
CECL and Technology
The implementation of the Financial Accounting Standards Board Current Expected Credit Loss (CECL) standard is quickly approaching. The standard goes into effect for SEC filers in 2019, public companies who are not SEC filers in 2020, and the remaining institutions in 2021. Banks are deciding whether to use an automated system or perform the new calculation manually. Many institutions are looking to go the route of an automated system to ensure their calculation is accurate and bringing in the proper data. Institutions also need to review their data and how it’s being pulled into the software to make sure they have enough data and that the data is correct. As a best practice, management should run the CECL calculation against their current calculation to determine any impact the new calculation has. The parallel running of the calculation should be done for several quarters.
Bottom line, Management can not wait any longer to start a process for instituting the CECL model and coming up with a plan is the initial step.
For additional information contact bpeart@fosaudit.com.
Brandon Peart | CECL and Technology | Current Expected Credit Loss