As the required implementation of the current expected credit losses (CECL)
model draws near, many institutions are focused on the mechanics of building a
satisfactory model – a critical first step in meeting regulatory expectations.
In addition to model development, management will need to determine satisfactory
supporting documentation that is “reasonable and supportable.” Defensible
documentation must be developed in support of assumptions and variables used or
considered for both the qualitative and quantitative elements of your CECL
model. Since the CECL model will differ from the former incurred-loss model,
management has an opportunity to overhaul the process for documenting the
allowance methodology. This webinar will link the current expectations for
documenting the allowance model with new CECL documentation considerations.
- Overview of current ALLL documentation expectations
Includes weaknesses identified in methodology statements and narratives based on
today’s expectations and the need to correct them as the CECL deadline
- The evolution of “reasonable and supportable” documentation
- Three important groups that will use your CECL supporting documentation
and their expectations
- Supporting documentation differences between the
current ALLL rules and new CECL expectations
- Policies, processes, and
controls changes from an incurred-loss model to the CECL model
Aaron Lewis, Young & Associates, Inc.