S&P Global Market Intelligence has partnered with Wolters Kluwer to provide an end-to-end Current Expected Credit Losses (CECL) solution.
The Financial Accounting Standards Board (FASB) introduced a new impairment model through CECL. Like IFRS 9, financial institutions in U.S. GAAP based countries now need to adopt a forward-looking expected loss model.
Unlike IFRS 9, CECL permits historical factors to retain a greater role in the process. Additionally, there is a difference in how the results of expected loss calculations are used throughout an organization and in reports to regulators and shareholders. As a result, banks now require an end-to-end solution to ensure compliance with the standard, due to be implemented in 2020.
Claudio Salinardi, executive vice president and general manager of Wolters Kluwer’s Finance, Risk & Reporting business, said, “Those firms impacted by CECL need to act now to ensure they are firmly on the road to compliance. S&P Global Market Intelligence brings deep rooted credit content and methodologies to this exciting partnership. Coupled with Wolters Kluwer’s expertise in integrated finance, risk and reporting this partnership provides an unrivaled opportunity to existing and new clients alike.”
S&P Global provides data and models so clients can meet analytical and operational challenges from evolving industry requirements such as Basel, Solvency II, MiFID II, IFRS 9, and CECL.
Its Credit Assessment Scorecards and Credit Analytics tools estimate the probability of default and loss given default of private, public, rated, or unrated companies and government entities.
The company has partnered with Wolters Kluwer’s Finance, Risk & Reporting business. Its OneSumX CECL solution enables compliance with all CECL requirements, from data management and governance, to credit risk models, expected credit loss calculations, accounting and disclosures.
The credit risk modeling capabilities include historical models such as vintage and loss rate methodologies, adjustments for current conditions through qualitative factors and adjustments for reasonable and supportable forecasts using quantitative overlays and mean reversion techniques.
OneSumX CECL leverages its state of the art accounting framework with Wolters Kluwer’s Regulatory Update Service (RUS) to apply and maintain all required allowance accounting, producing all FASB mandated disclosures.
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