Applying the CECL model to financial asset credit losses

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We continue our miniseries on loans and investments with a discussion of the current expected credit losses (CECL) impairment model, applicable to a broad range of financial assets.
In this episode, we discuss:

3:42 – A refresher on the CECL model
8:02 – Impact of the current economic environment on credit losses
23:43 – Monitoring and governance of credit losses
26:46 – SEC comment letters and other activity related to CECL
30:49 – FASB developments related to CECL, including purchased financial assets

For more information, see chapter 7 of our Loans and investments guide. Also, check out our other episodes in this miniseries, Accounting for debt securities held by corporates and Accounting for loan receivables by corporates. Additionally, follow this podcast on your favorite podcast app for more episodes.
Catherine Espino is a partner in PwC’s National Office with 20 years of experience serving large financial institutions, broker-dealers, as well as smaller subsidiaries and private companies. Catherine focuses on advising companies within the financial services and non-financial services sectors on significant and complex accounting issues.
Bret Dooley is a Deputy Chief Accountant in PwC’s National Office who leads teams focused on the financial services sectors and accounting for financial instruments. He has over 25 years of experience in the financial services, banking, and capital markets industries. Bret focuses on emerging financial reporting issues related to financial instruments, developing interpretive guidance, and assisting clients in resolving complex accounting matters.
Heather Horn is the PwC National Office Sustainability and Thought Leader, responsible for developing our communications strategy and conveying firm positions on accounting, financial reporting, and sustainability matters. In addition, she is part of PwC’s global sustainability leadership team, developing interpretive guidance and consulting with companies as they transition from voluntary to mandatory sustainability reporting. She is also the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series.
Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to us_podcast@pwc.com.

Chapters

1. Applying the CECL model to financial asset credit losses (00:00:00)

2. A refresher on the CECL model (00:03:42)

3. Impact of the current economic environment on credit losses (00:08:02)

4. Monitoring and governance of credit losses (00:23:43)

5. SEC comment letters and other activity related to CECL (00:26:46)

6. FASB developments related to CECL, including purchased financial assets (00:30:49)

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