The new credit-loss accounting rules apply to corporate entities, too
CECL may significantly impact how both financial and non-financial entities calculate credit loss reserves. However, for non-financial entities (“corporates”), CECL also requires a major shift in perspective, because for the first time they will need to measure potential credit losses from a forward-looking perspective, in particular exposure related to long-term trade receivables and contract assets.
With little or no experience forecasting or modelling economic conditions, and potentially insufficient data available to do so, corporates are facing a complex challenge to comply with CECL.
The time to prepare is now. KPMG LLP (KPMG) describes the accounting and governance changes needed to comply in our new paper, Don’t underestimate the impact of CECL on corporate entities. Download to read more.