Applying the New Expected Credit Loss Model

Learning Objectives

• To discuss the core principles and latest updates of ASC Topic 326, Financial Instruments - Credit Losses.
• To analyze the application and implications of the Current Expected Credit Loss (CECL) model on financial reporting.
• To explain diverse estimation methods for expected credit losses, including discounted cash flow and probability-of-default models.
• To discuss how to navigate complexities in identifying credit quality indicators and contractual terms affecting credit loss estimation.
• To gain insights into adjustments to historical experience and evaluate factors impacting collectability in financial assets.

Course Description

Enhance your accounting expertise with the latest insights on the Expected Credit Loss (ECL) model outlined in our comprehensive CPE webinar. Authored by Jennifer Louis, it offers an in-depth understanding of ASC 326, Financial Instruments - Credit Losses, and its impact on financial reporting. You'll navigate through complex accounting requirements, enabling you to recognize credit losses more efficiently.

Our CPE Accounting course covers various facets, including identifying the applicability of ASC Topic 326 across diverse entities, emphasizing the measurement and recording of allowances for financial instruments at their initial recognition. It emphasizes the net amount expected to be collected on financial assets and the adjustment of the amortized cost basis to reflect credit loss allowances accurately.

Dive into the CECL model, which mandates the assessment of financial assets for impairment based on expected credit losses rather than incurred losses. The course guides you through different estimation methods, such as discounted cash flow, loss rate, roll rate, probability-of-default, and aging schedule methods, empowering you to select the most suitable approach.

This program aids in navigating complex areas, detailing the unit of account and factors influencing the estimation of credit losses, including credit quality indicators and contractual terms. Furthermore, it explores nuances like adjustments to historical experience and evaluating collectability, empowering you with practical tools to enhance financial reporting accuracy.

Major Topics:

• Core Principles and Latest Updates of ASC Topic 326
• Application and Implications of the Current Expected Credit Loss (CECL) Model
• Estimation Methods for Expected Credit Losses: Discounted Cash Flow, Probability-of-Default Models
• Identifying Credit Quality Indicators and Contractual Terms Affecting Credit Loss Estimation
• Adjustments to Historical Experience and Factors Impacting Collectability in Financial Assets

Join our online course to gain a competitive edge in understanding, applying, and staying compliant with the Expected Credit Loss model, elevating your proficiency in accounting standards and financial reporting practices. 

Overview

• Applicability of ASC topic 326

  3 mins
• Common items outside of scope

  17 mins
• Focus on trade receivables

  31 mins
• Write-offs: Full or partial

  49 mins
• Off-Balance sheet exposures

  65 mins
• Available-for-sale debt securities

  83 mins
• Individual security level assessment required

  95 mins