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The Decision Usefulness of Current Expected Credit Losses: Users’ Views about the Current Expected Credit Losses Model

Jordan M. Bable et al.

Behavioral Research in Accounting2025https://doi.org/10.2308/bria-2023-027article
AJG 3ABDC A
Weight
0.50

Abstract

In 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-13, “Financial Instruments—Credit Losses,” requiring firms to switch to a current expected credit losses (CECL) model. To assess the impact of this new standard, we performed semistructured interviews with analysts, trade group members, and financial journalists, all of whom have experience with CECL. Overall, interviewees shared the view that the CECL standard-setting process was tumultuous and political. Interviewees also stated that CECL led to perceptions of decreased decision usefulness of loan loss information and decreased comparability among reporting firms but had little impact on firms’ lending operations. Our study answers the call from the FASB to perform research into the impacts of CECL and also contributes to the literature on sell-side analyst decision making and the literature on the determinants of decision usefulness for analysts. Data Availability: Data are not available for confidentiality reasons. JEL Classifications: G21; G28; M41; M48.

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https://doi.org/https://doi.org/10.2308/bria-2023-027

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@article{jordan2025,
  title        = {{The Decision Usefulness of Current Expected Credit Losses: Users’ Views about the Current Expected Credit Losses Model}},
  author       = {Jordan M. Bable et al.},
  journal      = {Behavioral Research in Accounting},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.2308/bria-2023-027},
}

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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