Knowledge Center >

Q2 Technical Series: Quantifying the Qualitative

ASC 326 Current Expected Credit Loss (“CECL”) brought many changes to the allowance process but one item that remained the same: the need for qualitative factors. While many may have hoped that reliance on qualitative factors would be largely eliminated, extremely low historical loss experience and model limitations have resulted in lower-than-expected quantitative losses and supported the continued need for qualitative adjustments. CECL guidance states that the allowance calculation is a combination of historical losses, as well as adjustments for current conditions and a reasonable and supportable forecast of future losses. To the extent the bank believes the historical experience in their CECL model does not represent a bank’s expectation of future losses, banks should consider the use of qualitative factors.

Register for an event

Date: Jun 22, 2022

Time (EST): 2:30 pm

- 3:30 pm

More events you may be interested in

Ready to get started.

Let us share more about how our analytical tools and software have helped other management teams maximize their profitability…and how we can do the same for you.

Thank you!

Please help us communicate better.

As a subscriber, you’ll enjoy exclusive offers and product updates directly from Valuant. Providing additional information will help us deliver the updates you care about most. We value your privacy and promise never to share you personal information or email address.