ECL & CECL Modelling

ECL & CECL Modelling | Scoring Models | Data Analytics | Python | Shasat
 

Impairment under IFRS & US GAAP | ECL & CECL Quantitative Modeling | Python-Based Models | Data & Model Calibration | Back Testing | Reporting

 

Shasat provides specialized modelling solutions for financial institutions, ensuring compliance with IFRS 9’s impairment requirements through the Expected Credit Loss (ECL) approach. Similarly, we support compliance with the Current Expected Credit Loss (CECL) approach under US GAAP (ASC 326). Our expertise ensures precise accounting and regulatory-compliant impairment modelling, thereby enhancing accuracy, risk management, and financial reporting integrity.
 

Shasat Consulting leads the industry in IFRS 9 implementation, delivering unmatched expertise to financial and non-financial institutions globally. We specialize in guiding clients through the complexities of IFRS 9, ensuring seamless transitions and full compliance with global financial reporting standards. Moreover, our deep industry knowledge allows us to simplify complex regulatory requirements while optimizing financial reporting.

With a client-centric approach, Shasat Consulting tailors solutions to meet unique business needs. We focus on minimizing compliance risks and enhancing operational efficiency. Additionally, our team provides end-to-end support, from initial gap analysis to full-scale IFRS 9 implementation and post-implementation reviews.

Furthermore, we leverage advanced methodologies and industry best practices to ensure accurate Expected Credit Loss (ECL) modeling and compliance. Our commitment to precision and strategic insight makes Shasat the ideal partner for mastering IFRS 9 complexities.

 

IFRS 9 Impairment – Expected Credit Loss Modelling

Shasat Consulting streamlines Expected Credit Loss (ECL) model implementation under IFRS 9, transforming credit risk management for financial institutions. We develop robust ECL models using advanced mathematical techniques such as matrices, Monte Carlo simulations, stochastic processes, regression analysis, and time series modeling. Moreover, we integrate these methodologies with cutting-edge technology and deep expertise in building and testing Python-based ECL models. This approach ensures seamless alignment with IFRS 9 standards, enhancing credit loss prediction accuracy and cost-efficiency.

Our services encompass complete ECL implementation, post-implementation reviews, and model optimization. These steps address discrepancies and adapt the model to current and future risks. In addition, with extensive expertise in ECL model development, Python-based modelling, system reviews, scenario planning, and ongoing calibration, Shasat Consulting empowers institutions to strengthen financial frameworks. This process also helps mitigate foreseeable risks.

 

Expected Credit Loss Implementation Approach

From initial assessments to model refinement, Shasat Consulting offers end-to-end support. Partner with Shasat Consulting to simplify IFRS 9 ECL implementation and strengthen your institution’s financial resilience.  Our IFRS 9 ECL implementation focuses on:

  • Data Quality Assessment: We evaluate data accuracy, completeness, and consistency, focusing on rating and credit risk methodologies.
  • Multiple Quantitative Models: We use diverse ECL models tailored to portfolio products, capturing unique risk factors effectively.
  • Scoring Models: We develop and implement advanced scoring models to assess credit risk, optimize decision-making, and enhance predictive accuracy.
  • Impairment Methodology Review: We assess Expected Default (ED), Probability of Default (PD), and Loss Given Default (LGD), ensuring compliance with credit risk policies.
  • Model Development & Validation: We design and validate robust ECL/CECL models aligned with the latest regulations and best practices.
  • Scenario Development: We create economic scenarios, estimating PDs and LGDs to assess impacts under varying market conditions.
  • Testing & Calibration: We run test scenarios and continuously calibrate models to maintain accuracy and relevance.
  • Disclosure & Compliance: We define disclosure requirements for transparent reporting, ensuring compliance with IFRS 9.

Through rigorous analysis and continuous refinement, Shasat ensures your ECL models stay accurate, compliant, and aligned with evolving market conditions.

 

Current Expected Credit Loss (CECL) Modelling under US GAAP (ASC 326)

For institutions governed by US GAAP, our CECL modeling solutions are carefully developed to fulfill the Current Expected Credit Loss framework requirements as stipulated in ASC 326. We ensure compliance with all necessary regulatory standards.

Focusing on lifetime credit loss estimation from the point of initial recognition, our models offer detailed, forward-looking loss estimates. They provide institutions with a clear view of potential credit losses over time. By incorporating a range of economic scenarios and utilizing advanced statistical techniques, we provide accurate credit risk assessments. This approach enhances financial forecasting and strategic planning.

This method gives financial organizations a thorough understanding of their expected credit losses. It facilitates effective capital planning and risk mitigation while ensuring compliance with US GAAP’s ASC 326 standards. By partnering with Shasat, organizations gain access to profound expertise in credit risk modeling. They not only achieve regulatory compliance with IFRS 9 and CECL (ASC 326) but also gain a strategic edge in managing the complexities of credit risk.

 

Why Shasat Consulting?

Opting for Shasat Consulting equates to aligning with a premier financial consultancy, distinguished by:

  • Profound Expertise: Our team, rich in experience, excels in both qualitative and quantitative modeling for IFRS 9 implementation, showcasing unmatched proficiency.
  • Tailored Solutions: We craft bespoke strategies, finely tuned to each client’s specific requirements, ensuring not only compliance but also a competitive edge.
  • Pre & Post ECL implementation Support: Shasat provides end-to-end support, from initial analysis to post-implementation, ensuring a smooth transition to IFRS 9 standards.

In today’s fast-changing financial landscape, institutions need a partner who masters IFRS 9 and US GAAP and applies them effectively. Shasat Consulting is that partner. We combine technical expertise with practical solutions to ensure seamless IFRS 9 and ASC 326 implementation while providing strategic advantages.

Moreover, our excellence, combined with deep knowledge of financial instruments, credit loss models, and valuation, distinguishes us. We don’t just ensure compliance—we create opportunities for enhanced financial reporting and strategic growth.

Shasat Consulting’s ECL and CECL implementation services blend technical precision, strategic insight, and real-world application. Additionally, we empower financial and non-financial institutions to navigate IFRS and US GAAP complexities confidently. Our approach guarantees compliance, strengthens financial reporting, and supports long-term growth.

Let Shasat guide you through the complex process of impairment model implementation with expertise and precision. With our expertise, your institution gains a competitive edge in the evolving world of finance.

 

 

Contact Us

If you’re interested in utilizing our services, simply follow the link and drop us an email. In response, we’ll promptly contact you to discuss further. Additionally, if your organization requires any assistance, please don’t hesitate to contact our Valuation Desk.