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CECL is a financial accounting standard that requires all companies to estimate and record an allowance for expected credit losses on their financial asset portfolios, including loans and investments. In preparing a CECL estimate, companies develop models to help predict the estimated amounts. Benchmarking, back-testing, and sensitivity analyses are analysis techniques used in the context of modeling to evaluate the accuracy and robustness of the models used. These techniques are part of a model-risk management policy and are not part of the CECL standard specifically.


About The Authors

Mike Umscheid

President and CEO