CECL guidebook part 4: Preparing financial statement disclosures
In the fourth guidebook of our CECL series, we cover need-to-know information and guidance about effectively preparing financial disclosure statements after adopting CECL standards.
Understanding the complex disclosure methodologies and requirements under the current expected credit loss (CECL) standards is imperative for providing financial statement users with valuable, transparent information about an institution’s allowance for credit losses (ACL).
In the fourth installment of our CECL series, CECL guidebook: Disclosures, we aim to provide financial institutions with essential information, guidance, and illustrated examples to effectively prepare financial statement disclosures after adopting CECL.
In this fourth guidebook of our CECL series, we’ll cover new concepts introduced under CECL that impact disclosures, identification of disclosure requirements, and examples of how to execute the quantitative disclosure requirements.
- Key CECL concepts for disclosures
- Portfolio segment
- Class of financing receivable
- Credit quality indicators
- Year of origination for vintage disclosures
- Accounting policy elections
- Purchased credit-deteriorated (PCD) financial assets
- Public business entities (PBE)
- Disclosure requirements
- Financing receivables
- Allowance for credit losses
- Credit quality disclosures
- Past-due and nonaccrual loans
- Loan modifications
- Example disclosures
- Example A: Financing receivables
- Example B: Allowance for credit losses
- Example C1: Credit quality disclosures — Non-PBE
- Example C2: Credit quality disclosures — PBE
- Example D1: Nonaccrual loans
- Example D2: Past-due loans
- Example E: Modifications