Financial Instruments: The Way Forward — Discussions on ASC 326 and CECL's Impact on Corporations
ASC 326 on credit losses will usher in a new era of credit measurement, transitioning from an incurred to an expected credit loss model (CECL). This accounting change will require estimating expected credit losses, reporting those losses upfront, and adjusting them over the life of the loan.
Across industries, many publicly traded companies that hold financial assets such as trade and loan receivables will likely see an impact. They will need to assess and implement the standard, coordinate with auditors, draft disclosures, revise financial credit loss models, and onboard new technologies. Companies are also responding to the new hedge accounting standard ASC 815, which promises to simplify accounting and refine corporate risk strategy.
View discussions below from Financial Instruments: The Way Forward, an event hosted by Bloomberg Tax & Accounting and Deloitte. Chief financial officers, controllers, financial accountants, auditors, analysts, and other accounting professionals convened to discuss how corporations should respond to the new ASC 326 standard on credit losses.
Top ABA Concerns and Considerations on CECL
Michael Gullette, SVP of Tax & Accounting at the American Bankers Association, covers the top concerns and considerations of ABA as it relates to CECL, and offers thoughts on CECL vs. incurred loss.
CECL Model Changes, Development, and Measurement
Michael Jacobs, Lead Quantitative Analytics & Modeling Expert at PNC, discusses model changes for CECL, considerations for model development and methods of measuring CECL, and how communication and collaboration between business units is key to tackling modeling.