The Simplified CECL Tool provides a methodology for credit unions to determine the Allowance for Credit Losses (ACL) on loans and leases for their loan portfolio. On the Call Report, the ACL is reported on Line 18, Page 2, and is labeled: Allowance for Credit Losses on Loans and Leases (AS0048).
The Simplified CECL Tool was developed primarily for credit unions with less than $100 million in assets. The Weighted Average Remaining Maturity (WARM) methodology for calculating the ACL was chosen by the NCUA because the Financial Accounting Standards Board deemed it appropriate to estimate a credit loss allowance for less complex financial asset pools.
This tool relies on portfolio-level WARM proxy data to estimate current expected credit losses. For the WARM assumptions to remain applicable in an ever-changing environment, the Simplified CECL Tool will be updated quarterly.
Use of the Simplified CECL Tool and the underlying methodology may or may not be appropriate for any particular credit union. Each credit union’s management is responsible for determining whether this approach is appropriate given their institution’s unique facts and circumstances.
A credit union may utilize a different method for estimating its ACL, and management is not precluded from selecting a different method if it determines that method will result in a stronger estimate of an institution’s ACL. The selected method should be appropriate for the financial assets being evaluated, consistent with the credit union's size and complexity, and well documented, with clear explanations of the supporting analyses and rationale.
Download the Simplified CECL Tool, September 2025 Version
General Resources
- Frequently Asked Questions
- Users Guide
- Model Development Document
- Historical Loss Rates, 2022-2024 Calculation Details
- Historical Loss Rates, 2021-2023 Calculation Details
- Historical Loss Rates, 2020-2022 Calculation Details
- Historical Loss Rates, 2019-2021 Calculation Details
- Letter to Credit Union 22-CU-10, Simplified CECL Tool for Credit Unions
- FASB Staff Q&A: TOPIC 326, NO. 1: Whether the Weighted-Average Remaining Maturity Method is an Acceptable Method to Estimate Expected Credit Losses
Previous Versions of the Simplified CECL Tool
- June 30, 2025 Version
- March 31, 2025 Version
- December 31, 2024 Version
- September 30, 2024 Version
- June 30, 2024, Version
- March 31, 2024, Version
- December 31, 2023, Version
- September 30, 2023, Version
- June 30, 2023, Version
- March 31, 2023, Version
- December 31, 2022, Version
- September 30, 2022, Version
- June 30, 2022, Version
Disclaimer
Utilizing the Simplified CECL Tool approach does not by itself ensure compliance with U.S. Generally Accepted Accounting Principles (GAAP) or any other requirement. While ASC 326 (Financial Instruments—Credit Losses) allows entities to use judgment in determining appropriate and relevant information and estimation methods, a credit union’s management is responsible for ensuring the ACL conforms with GAAP and adequately covers risk.
By using the Simplified CECL Tool, you assume the risk related to your use of the tool, including your use of any updates to it. The NCUA is providing the Simplified CECL Tool “as is” and it expressly disclaims all warranties, express or implied, including any implied warranties of merchantability and fitness for a particular purpose. The NCUA is not liable to you or any third party for any direct, indirect, incidental, consequential, special, or exemplary damages or lost profit related to the use of the tool. Users may not modify the Simplified CECL Tool and present it as an official government document.