All articles in this category pertain to current expected credit losses, referred to as CECL. ASC 326, Financial Instruments – Credit Losses is a new accounting standard issued by FASB that defines a new methodology for estimating credit losses, commonly referred to as CECL. FASB’s CECL standard applies to any entity issuing credit, such as banks or credit unions.

CECL replaces ASC 450-20 (FAS 5) and ASC 310-10-35 (FAS 114) which defined the allowance for loan and lease losses (ALLL) methodology also previously known as the reserve for bad debts. The new standard will improve financial reporting.

Learn more about CECL below.

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