CECL Modeling and Accounting

Compliance with the current expected credit loss (CECL) standard starts with organizing your data and selecting the right models.

We can lend a helping hand on CECL

While the math for CECL is straightforward, organizing the data can be complex. CLA can predict potential challenges with each model and help create opportunities for your organization as you learn what’s needed for the accounting process. Our resource center can also help you prepare your financial institution for CECL.

We’re committed to helping address what matters most to you:

  • Selecting the model(s) that fits your organization’s specific needs
  • Identifying relevant, reliable, and sufficient data for modeling
  • Determining software needs for organizing and storing your calculation data
  • Segmenting your portfolios based on risk
  • Simplifying the standard’s specific guidance for easier implementation
  • Identifying how the standard may impact the recording and disclosure of credit losses in your financial statements

Experience our client-focused approach

Determining what historical information, current conditions, and reasonable and supportable forecasts should be included in your expected loss models doesn’t come easy — but you don’t have to figure it out alone. Whether you’re ultimately looking to monitor data on your own, or are looking for more involved assistance for financial assets and loan portfolios, we help organizations of all sizes calculate lifetime expected losses.

CECL modeling and accounting services

Using firsthand experiences, we’ll work through the following phases of implementation together:

Planning, orientation, and training phase

Get to know your financial assets and CECL models, then review a summary of the convergence guidance. We’ll help you build a high-level project plan and establish a committee to provide project oversight — and our customized training program highlights your business practices that may change due to the new standard.

Historical loss rate methodology phase

Evaluate the pros and cons of each methodology for computing historical lifetime loss rates and their applicability to your receivable portfolio.

Data collection and historic lifetime loss computation phase

Identify required data elements based on selected methodologies. This includes organizing your data into a useable format and developing the computation for historic lifetime loss rates.

Additional phases

Once you’ve completed these phases, we can also help you implement qualitative and forecast adjustments into your calculation, update policies and procedures, and organize your data to comply with the new financial statement disclosure requirements.

Prepare your financial institution for CECL
Visit our resource center.

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