The Financial Accounting Standards Board has just issued its new loan loss accounting framework, also known as the current expected credit loss (CECL) model. The new standard is expected to increase the allowance for loan and lease losses throughout the industry. CECL will require significant operational changes at all banks, including collecting and analyzing the type of data that supports the modeling of the life-of-loan loss expectation, as well as forecasting and quantifying losses in the future.

The ABA has prepared a number of helpful resources to help bankers prepare for implementation and we wanted to share these with you. Click here to view a 10-minute introductory video on how CECL is different from current accounting. They have also prepared a detailed Background and FAQ document, that while it is 23 pages, it’s an easy to read document in Q&A format, indexed with hyperlinks.

Additionally, the regulatory agencies have also published their own detailed, joint FAQ document, published on December 19, 2016, which can be accessed here.