FASB extends CECL, what should you do now? Focus on data!
On October 16, 2019, the Financial Accounting Standards Board approved the change in the adoption dates for several standards including CECL. This extension means more time for your credit union to gather important data. At ARCSys, we currently have clients loading data back to the year 2000, with most loading data back to 2008 or 2009. Clients are also sending their old optical files which we are converting to return data in time for the new adoption date.
More data will allow you to have better control over your allowance, and reduce the volatility in your calculations. Spend this extra time getting your data; it’s that important!
This data process has several key phases:
- Obtain
- Load
- Validate, reconcile and report exceptions
- Model Segment/Class risk structures
- Unadjusted and adjusted data
- Forecast with External Q Factors
While very few institutions return complete data in time, most can obtain the basic CECL data sets needed. Download this schedule of data elements summarized by the following categories:
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