Delving into the FASB's current expected credit loss model

The Financial Accounting Standards Board’s (FASB’s) current expected credit loss (CECL) rule could mean loss provisions for loans are three times higher than with International Financial Reporting Standard (IFRS) 9. These new accounting rules are expected to hit US banks the hardest. 

With CECL requiring lifetime provisioning, coupled with complex modelling and increased public disclosure banks are struggling as they reassess existing processes for credit modelling. With questions still looming around the impacts of the FASB’s new standard, the road to implementation will be obstacle-ridden.

A panel of experts offers insights and opinions on interpreting the new rules and the potential impact on profit and loss:

• Interpreting the new accounting rules
• Identifying the differences between IFRS 9 and CECL
• Moving from an incurred loss accounting model to an expected loss model
• Support for the reporting requirements under CECL
• Data requirements and systems architecture to secure a CECL process
• The likelihood of banks being CECL-compliant by the 2019 deadline and whether CECL can improve integration between risk and finance

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