# Write the qualitative factor memo for our CECL allowance

Documented support for qualitative adjustments to the credit loss allowance, tied to evidence, direction, and size.

- Topic: Finance & Accounting
- Framework: RTF
- Level: Standard
- Tags: Finance, Write, Fill-in Template
- Source: https://www.thinkwithprompt.com/prompts/write-the-qualitative-factor-memo-for-our-cecl-allowance

## Prompt

```text
Help me document the qualitative factor (Q-factor) adjustments to our current expected credit loss (CECL) allowance.

**Period end:** [DATE]
**Portfolio segments:** [e.g. "CRE non-owner occupied", "C&I", "residential mortgage", "consumer"]
**Quantitative model results by segment:** [PASTE reserve amounts and loss rates]
**Current Q-factor adjustments and prior period values:** [PASTE]
**Evidence available:** [changes in underwriting standards, portfolio concentrations, delinquency and classified trends, collateral values, economic forecast changes, staff experience, external factors]
**Reasonable and supportable forecast period and reversion method:** [DETAILS]

For each segment, write:
1. Which factors are adjusted and why the quantitative model does not already capture them (avoid double-counting with the economic forecast).
2. The evidence supporting each adjustment, with the data source.
3. The direction and size of each adjustment, and how the size was determined (a stated framework, not judgment alone).
4. Changes from the prior period and the reason.

Also include:
- A summary table: segment, model reserve, Q-factor adjustment (bps and dollars), total reserve, change from prior period.
- A directional consistency check: flag any adjustment that moves opposite to the trend in the evidence.
- Questions an auditor or examiner is likely to ask, with where the answer is documented.

Use only my figures; mark gaps [CONFIRM]. Accounting conclusions should be reviewed by our accounting policy team and external auditors.
```

## What to fill in

- DATE
- PASTE reserve amounts and loss rates
- PASTE
- DETAILS
- CONFIRM

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