Is your organization taking the right approach?
Financial institutions filing under US-GAAP accounting standards and managing available-for-sale (AFS) and held-to-maturity (HTM) fixed income portfolios, are actively evaluating business processes and technology strategies in preparation for the new Current Expected Credit Loss (CECL) standard.
Released by the Financial Accounting Standards Board (FASB), CECL will replace the current impairment rules for debt securities in HTM and AFS holding categories. The foundation of this update is a change of the incurred loss methodology, where expected credit losses should now be calculated over the life of the loan or debt security beginning from Day 1, not just credit losses incurred as of the reporting date. While the expected outcome is clear, firms have discretion in their choice of methodology to get there.
In this paper, you’ll learn key tips to apply to your CECL strategy and to help you evaluate:
- System modernization vs maintaining legacy infrastructure and processes
- Technology considerations spanning homegrown to front-to-back integrated platforms
- Key evaluation criteria for selecting the right technology partner