Current Expected Credit Losses Policy
The purpose of this Current Expected Credit Losses Policy Template (CECL Policy Template) is for a bank, credit union, or other type of financial institution to maintain an adequate methodology for estimating and maintaining allowances for credit losses to properly reflect an accurate financial position of the Bank and to comply with regulatory and Financial Accounting Standards Board (FASB) guidelines. Under Current Expected Credit Losses (CECL), the allowance for credit losses is a valuation account, measured as the difference between an organization’s amortized cost basis and the net amount expected to be collected on the financial assets (i.e., lifetime credit losses). In this regard, the allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net amount expected to be collected on the financial asset.
Table of Contents
- Purpose and Contents – Topic 1
- Policy Statement – Topic 2
- Definitions – Topic 3
- Responsibility – Topic 4
- Measurement Methods – Topic 5
- Use of Vendors – Topic 6
- Portfolio Segmentation – Topic 7
- Qualitative Adjustments and Systematic Allowance Processes – Topic 8
- Recommendations, Documentation and Approval – Topic 9
- Audit Policy – Topic 10
- Staff Training – Topic 11
- Retention of Documentation – Topic 12
Recent updates to this product:
Joint Release – Agencies Announce Two Actions to Support Lending to Households and Businesses
Additional and Updated Interagency Frequently Asked Questions on the New Accounting Standard on Financial Instruments – Credit Losses
Joint Release – Agencies Allow Three-Year Regulatory Capital Phase In for New Current Expected Credit Losses (CECL) Accounting Standard
This Current Expected Credit Losses Policy Template (approximately 23 pages) is available in Microsoft® Word format.
NOTE: We highly recommend adding a Product Update Protection Plan when placing an order for this product since we anticipate that the federal regulators will be releasing additional guidance during the three-year phase in period as financial institutions continue to adopt the new CECL accounting standard.
Want to ensure your purchase from BankPolicies.com remains current? Add a Product Update Protection Plan to your shopping cart to ensure that you will automatically receive an updated version every time it is revised via e-mail within one year from the last date of purchase. This timely and cost-effective solution ensures that you stay on top of federal regulatory changes and industry recommended best practices.
When updates are made you will receive detailed information regarding why the product was updated and what has changed within the product in our Product Update Notification e-mail correspondence. This enables you to make an informed decision on whether to make any changes to the policy or procedure you implemented for your financial institution from the revised template.
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