Tips for Preparing Year-end ALLL Calculations

With the Financial Accounting Standard Board’s (FASB) proposed current expected credit loss model (CECL), banks will be required to “look ahead” in the estimation of credit losses and use of a “life of loan” expected, credit loss estimate when calculating their allowance for loan and lease losses (ALLL) methodologies. Here are several key factors and steps that banks and credit unions should take into consideration while calculating year-end reserves. [1/2]