Review the implementation process now to avoid headaches in 2020 and beyond
By year-end 2019, SEC filers that are not smaller reporting companies and other entities will need to finish implementing the current expected credit loss accounting standard (CECL). For three years, banks have been working to understand the requirements and build processes and capabilities to comply with CECL. As the transition date approaches, companies should ensure they have a robust implementation process in place and a reliable ongoing CECL financial reporting process. We find that even companies that have made significant investments in creating an efficient and reliable CECL process may have overlooked critical sources of risk in model selection, data limitations, and other areas. Conducting a diligent CECL process review now is a crucial step in the development of a sustainable long-term solution for the implementation of the new standard.
KPMG LLP (KPMG) describes how a CECL process review reveals not only potential transition risks, but also helps companies adopt industry-accepted practices for ongoing CECL reporting in a new paper, Countdown to CECL. Download to read more.