Current Expected Credit Loss (CECL)/IFRS9 | Protiviti - Australia

Current Expected Credit Loss (CECL)/IFRS9

Current Expected Credit Loss (CECL)/IFRS9

Current Expected Credit Loss (CECL)/IFRS9

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Change is on the way. Financial institutions and lenders are turning their attention to having effective CECL models in place before the rapidly-approaching deadline.

The new guidance provided, the Current Expected Credit Loss (CECL) and International Financial Reporting Standards (IFRS) regulation 9 internationally, requires lending institutions to provide investors with better information by timely recording and reporting the full amount of credit losses that are expected in their loan portfolios. For SEC filer institutions, application of CECL should be by the end of 2019; a year later for non-SEC filers.

Your CECL action plan will be designed by Protiviti with a keen eye on your organisation’s specific requirements. We will work side-by-side with you to evaluate your internal resources, portfolio size and complexity to determine the right modeling methodology.

Protiviti’s dedicated professionals will apply our experience in allowance and credit risk models, process design, data acquisition/sourcing, system implementation, and model validation to design customised solutions. And we’ll provide the appropriate resources to help you execute the right solution for you.

Our areas of expertise:

Risk Identification

We carefully evaluate the immediate and longer-term impacts that the CECL accounting standard could have on your organisation, including required updates to analytical methodologies, long-term data collection and redesigned processes and systems.

Model development or model redesign

We apply our expertise and experience in allowance and credit risk models, process design, data acquisition/sourcing and system implementation to develop customised solutions. Our team can also assess your models and provide recommendations to calibrate or re-design them.

Model validation

The Model Risk team provides independent validation services to assess compliance of the models with CECL requirements and consistency with industry standards.

Data preparation and management

Our Data Management team can help enhance overall data infrastructures, streamline data collection processes and ensure proper governance over required data assets. These data improvements will be needed to meet the CECL methodology requirements and produce timely financial disclosure reports.