Managing data and expectations
When the Financial Accounting Standards Board (FASB) introduced a new impairment model, commonly known as CECL (Current Expected Credit Losses), applicable to the U.S. GAAP based countries such as the United States, Israel, Japan (limited), Switzerland (optional), it represented major shift from the existing incurred loss model.
Preparing for and implementing CECL will compel financial institutions to think about credit risk in new and more timely ways and to either recalibrate existing models or develop new ones, with matters being especially thorny and complex for institutions that operate across borders. Furthermore, CECL imposes a lot more requirements on financial institutions on the accounting and disclosure fronts.