Asset Purchases guidance for loan pool purchases and mergers

How ARCSys
Can Support You

CECL requires new Asset Purchases guidance for loan pool purchases and mergers. ARCSys statistical modeling and additional services can support your Fair Market Value calculations when valuing purchased financial assets. Under CECL, allowances are now considered part of the purchase accounting process. It is imperative to ensure the allowances calculated are equal to the acquirer’s allowances from Day 1.

Our Process

Recommendation of segment class identification for continuous model purchases
Calculation of expected allowance at purchase
Estimation of fair value based on liquidity risk, interest rate risk, prepayment risk, and credit risk
Detailed reports on the analysis of the Fair Market Value determination

Learn More

The best CECL analytics are built with

Key Changes in
Merger Accounting

CECL allowances are calculated by the acquirer as part of the Fair Market Value calculation and posted through the merger journal entries

Changes in CECL allowances after a merger are run through a provision account

Allowances are required for loans and investments

Key Changes in
Purchase Loan Accounting

Determination of Purchased Credit Deteriorated (PCD) before purchase

CECL allowances are calculated by the acquirer as part of the Fair Market Value calculation and posted through the purchased accounting journal entries

Changes in CECL allowances after a merger are run through a provision account

It is imperative that the allowance prescribed at the merger is utilizing the same method and model that will be applied by the acquirer after the merger.

Asset Purchases

How ARCSys Can Support You

Our Process

Key Changes in Merger Accounting

Key Changes in Purchase Loan Accounting

ARCSys Consulting

How ARCSys
Can Support You

Key Changes in
Merger Accounting

Key Changes in
Purchase Loan Accounting