Guest Commentary By Kylee Wooten, Abrigo


CECL Unknowns? Here’s What You Need to Know


For years, experts have emphasized the importance of preparing early for the implementation of the current expected credit loss standard. CECL “analysis paralysis” has plagued many financial institutions, delaying banks’ ability to get started quickly. Now, nearly a year out since the effective date for SEC filing institutions, the importance of making early implementation decisions continues to be a leading indicator of CECL success.


During a recent Abrigo CECL Symposium panel discussion, Reagan Camp with Abrigo, Gordon Dobner with BKD and Mike Gullette with the American Bankers Association addressed the most common questions they see in the field and worked to allay apprehension surrounding the new accounting standard.


24 mobankers.com


DOCUMENTING DECISIONS IS PARAMOUNT As an auditor, Dobner reminded financial institutions that the “perfect solution” doesn’t exist. However, making decisions and documenting why the institution made its decisions is paramount.


“I think the institutions that I’ve seen that have done the best in this situation were those that were able to make decisions,” he said. “A lot of people did a lot of good work in terms of having discussions, committee meetings, talking about all of their options. But at some point, you have to make a decision.”


Of course, much of the hesitation around making decisions comes with the need to forecast into the future with CECL, which is not a component of the incurred loss model. Where


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