Published in: CUNA Council

Credit unions have been discussing FASB’s decision to move to the CECL standard as a replacement for the current accounting methodology of allowance for loan and lease losses (ALLL) and other than temporary impairment (OTTI) over the past year. Recently, FASB granted a one-year extension for confirmed credit unions and non-public business entities to implement CECL. Currently, credit unions do not need to implement CECL until the fiscal year following December 15, 2021 (effectively January 1, 2022). This additional year gives all credit unions additional opportunity to ensure appropriate data can be collected for projecting losses and the appropriate CECL model is selected.

Step 1: Collecting the Data

One of the most important, resource-constraining tasks needed to develop a well-informed loss model is data collection. Creating an efficient data collection process can require significant human hours and potentially burdensome costs…

Click here to read the full article

ALM First offers investment advisory services through ALM First Financial Advisors, LLC, which is registered with the U.S. Securities and Exchange Commission (“SEC”). SEC registration does not constitute an endorsement of the firm by the SEC nor does it indicate that the firm has attained a particular level of skill or ability. The information contained herein does not constitute investment advice or a recommendation for you to purchase or sell any specific security. You are solely responsible for reviewing the content and for any actions you take or choose not to take based on your review of such content.

 Information contained herein was derived from third party sources as indicated. While such information is believed to be reliable, no representation or warranty is made concerning the accuracy of any information presented. We have not and will not independently verify this information. Where such sources include opinions and projections, such opinions and projections should be ascribed only to the applicable third party source and not to ALM First.

Thomas Griswold, CFA

Director, Advisory Services at ALM First