Magazine : Archives : 1st Quarter 2021

When CECL 
Met Covid-19

From an accounting perspective, 2020 was always going to be a significant, awkward and confusing year for banks. But no one could imagine just how monumental and complex the challenges would be when the biggest accounting change in decades encountered the most severe economic crisis since the Great Depression. The current expected credit loss standard, or CECL, was designed to change how banks set aside loss reserves with the hopes they would be better prepared for a financial crisis. But the timing, intensity and severity of the coronavirus pandemic and subsequent recession tested many banks’ CECL process, from models breaking...