Magazine : Archives : 3rd Quarter 2018

Five Questions for Bank Boards

Issued by the Financial Accounting Standards Board (FASB) in June 2016, the current expected credit loss model, or CECL, is one of the biggest accounting changes that the banking industry has experienced, as it replaces the current incurred loss model for estimating credit losses. The credit loss calculations under CECL will likely increase loan loss allowance levels, so boards should understand how the new standard will impact current strategies relative to growth and capital planning, says Chad Kellar, a partner at the advisory firm Crowe LLP. The new standard takes effect for fiscal years beginning after December 15, 2019, for...