4.1 Introduction

For assets measured at amortized cost, the estimate of expected credit losses will be (1) recognized immediately upon either origination or acquisition and (2) adjusted in each subsequent reporting period. Measurement is the most significant aspect of the CECL model. This chapter addresses the following topics:

• Contractual life (Section 4.2).
• The information an entity needs when estimating credit losses (Section 4.3).
• Measurement methods (Section 4.4).
• Write-offs and recoveries (Section 4.5).
• Credit enhancement features (Section 4.6).
• Considerations related to postacquisition accounting for acquired loans (Section 4.7).
• Subsequent events (Section 4.8).
• Transfers to other measurement categories (Section 4.9).