CECL Solution 

CECL, which stands for Current Expected Credit Loss, is a new accounting standard issued by the Financial Accounting Standards Board (FASB) for estimating loan losses. CECL replaces the current standards for loss accounting, commonly known as FAS-5 and FAS-114. For most credit unions, compliance with the new standard begins January 1, 2023.

CECL will change how credit unions account for expected credit losses. Instead of calculating bad debt reserve based on years past, CECL will require credit unions to calculate bad debt using forward-looking, predictive information. Credit unions will have to evaluate their potential credit losses and make an allowance for the total expected credit losses over the life of their loans.

For more information, visit the Catalyst Strategic Solutions website.