ECL & CECL Modelling

Impairment: ECL | CECL | Actuarial Risk Modelling |IFRS 9 | ASC 326 | IFRS 17


Shasat offers specialized modeling solutions for financial institutions seeking to comply with the impairment requirements under IFRS and US GAAP standards, specifically IFRS 9 and CECL under US GAAP, with a focus on ASC 326.

IFRS 9 ECL Modeling Solution:

Our IFRS 9 Expected Credit Loss (ECL) modeling services are tailored to assist institutions in accurately forecasting impairments over both the 12-month period and the life of a financial instrument, in accordance with the IFRS 9 standard. Leveraging advanced predictive analytics, our comprehensive approach integrates historical data, current conditions, and forward-looking information. Designed to include macroeconomic variables and the specific risk characteristics of financial instruments, our models facilitate dynamic and robust loss estimation. This ensures compliance with IFRS 9 while also improving credit risk management and offering strategic insights into the performance of financial instruments.

Current Expected Credit Loss (CECL) Modeling Solutions 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. Focusing on lifetime credit loss estimation from the point of initial recognition, our models offer detailed, forward-looking loss estimates. By incorporating a range of economic scenarios and utilizing advanced statistical techniques, we provide accurate credit risk assessments. This method gives financial organizations a thorough understanding of their expected credit losses, facilitating 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, not only achieving regulatory compliance with IFRS 9 and CECL (ASC 326) but also gaining a strategic edge in managing the complexities of credit risk.

Actuarial Risk Modelling (IFRS 17 & ASC 944))

Actuarial modelling involves the application of two types of models: deterministic and stochastic. Deterministic models are simple and estimate the probability of each event to predict the number of occurrences. Stochastic models, on the other hand, incorporate a higher degree of randomness, but require advanced computational resources, a thorough understanding of IFRS 17, and market knowledge. With the implementation of IFRS 17, it is crucial to review and adjust actuarial models to meet the new requirements and align with market practices.

Shasat’s actuarial modelling services provide insurers with a valuable combination of technical proficiency and a practical approach. With Shasat’s support, insurers can efficiently manage the entire modelling process, ensuring compliance with IFRS 17 and market standards.

Contact Us

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