What it is
ASC 326-20 asks for an estimate of expected credit losses over the life of the receivable, using historical experience, current conditions and reasonable and supportable forecasts. A loss-rate method on aging buckets is one common way to do it for trade receivables.
The Loss history tab calculates loss rates from your balances and write-offs. The Matrix tab applies a qualitative adjustment, removes individually evaluated accounts and reserves them specifically, computes the required allowance and the adjusting entry. A rollforward ties the booked allowance to the required amount.
When to use it
- Quarter-end and year-end allowance estimates.
- Documenting the CECL method for audit.
- Reviewing the effect of changing economic conditions.
What’s inside
- History tab with three periods by bucket
- Matrix with qualitative adjustment and specific reserves
- Required allowance and journal entry direction
- Allowance rollforward with tie-out
Standard cited
This template follows ASC 326-20. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use.
Questions
Is the aging method required?
No. ASC 326 does not prescribe a method. Choose one that fits your receivables, pool by shared risk characteristics and document it.
What is the qualitative adjustment?
A percentage added to or taken from the historical rate for current conditions and forecasts. You enter it and document the support.
What about accounts with unusual risk?
Evaluate them individually. The matrix removes them from the pool and adds a specific reserve.
Related templates
- Accounts Receivable Aging and Allowance Workpaper
- AR and AP Aging Report Template
- Disclosure Checklist: Revenue (ASC 606)
- Trial Balance Template with Mapping (Excel)
Last updated 11/05/2026. All free templates.