(July 2, 2021) A new tool aimed at helping smaller banks calculate their allowances under the new current expected credit loss (CECL) accounting standard was announced by the Federal Reserve this week.
The Fed said the spreadsheet-based tool — dubbed the “Scaled CECL Allowance for Losses Estimator” (SCALE) — draws on publicly available regulatory and industry data to aid community banks with assets of less than $1 billion.
The CECL accounting standard took effect for most public financial institutions in 2020; smaller banks (as with most credit unions) are not required to meet the standard until 2023.
SCALE will be officially launched July 15 in conjunction with a webinar, the Fed said, when it will also answer questions about the new tool. The event is geared to community banks and will feature representatives from the Financial Accounting Standards Board (FASB, the group that established the accounting standard) and the Conference of State Bank Supervisors (CSBS).
The Fed said registration instructions are available at the link below.