Impairment Gain or Loss Calculation

The final CECL is computed from Allowance and Provision values as mentioned in the previous section. The Impairment Gain or Loss for the current period is computed by comparing the current reporting date's Allowance and Provision values with the previous reporting dates' Allowance and Provision values.

Impairment Gain or Loss = (Current Allowance + Current Provision) - (Previous Allowance + Previous Provision) + Current Write-off - Current Recovery

Note:

The Previous Allowance and Previous Provision values are expected as a download. If the Financial Institution computes Reserve Adjustments, the same must reflect in the Previous Allowance and Previous Provision amounts that are provided in the next FIC MIS DATE or period. This is necessary to arrive at the correct value of the Required Reserve.

To know more about Required Reserve computation, see the Computation of Required Reserve section.