The CSBS State Supervisory Processes Committee, in consultation with state examiners, has developed and approved the above tool to help financial institutions prepare for the coming changes associated with the Financial Accounting Standards Board's (FASB) release of Accounting Standards Update (ASU) 2016-13, Financial Instruments—Credit Losses (Topic 326) commonly referred to as the Current Expected Credit Losses (CECL) method.
The tool provides a framework that a financial institution could use to plan for the eventual implementation of these accounting changes. CECL will have a significant impact on the way a financial institution estimates and provides for credit losses and early preparation is prudent. The associated examiner guide provides talking points, limitations, and other information examiners might find helpful if the tool is encountered in an examination. As explained in the examiner guide, the tool is not intended to establish regulatory expectations or deadlines.
This tool is offered as a resource and should be used as-needed. While some institutions may already be planning for CECL implementation, smaller institutions, in particular, reported difficulty understanding the changes and sought a straightforward tool to begin the planning process. This tool offers a means to get started and helps an institution set internal goals for the different implementation steps.
It is understood that each institution will approach the implementation of CECL differently, and this tool is not an attempt to standardize the implementation process or set forth regulatory expectations. Questions about the tool or examiner guide should be directed to Jami Flynn (firstname.lastname@example.org).
Access the CECL Readiness Tool
Updated November 2019
Additional Resource: Examiner Guide for Readiness Tool