With the adoption deadline nearing, specificity remains elusive as entities continue to build and refine their processes and controls.
Recently, many financial statement preparers received news that it is possible they will receive more time to comply with new standards around current expected credit losses—CECL. Still, entities are expending significant effort to prepare to implement the new standards, before they go into effect between January 2020 and January 2023, depending on the size and nature of the institution.
As we did last year, KPMG LLP has surveyed a number of entities in the commercial and consumer banking organization space, as well as other distinct financial services sectors, to determine the progress these entities are making in preparing for the new CECL requirements.
Two key themes emerged from this year’s survey:
The transition from the Allowance for Loan and Lease Losses under the current incurred loss model to an allowance for credit losses under CECL will present a number of challenges for institutions with financial assets measured at amortized cost, including U.S.-based banks, foreign banks with U.S. reporting obligations, insurance institutions, and nonfinancial institutions with an active treasury or financing group.
Find out how your company compares to others in implementing the new standard as the compliance date approaches.