New Financial Standards
The FASB and IASB have promulgated new guidance that requires forecasting of loan losses over the life of loans and then accruing that amount into the loan loss provision. This is a major change for lenders since the previous method only required estimating one year’s worth of losses and most used their experience to arrive at that number.
– This will have MAJOR implications for Lenders –
Most small to medium lenders will be hard hit by the data requirements and statistical forecasting in order to comply. TruDecision does that out of the box!!!
The new accounting standard requires estimating all future losses and booking them at origination, loans that are on the books will also need to estimate their future losses.
Lenders need to move quickly to implement data and tools.
Most small to medium lenders may not have the data they need.
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