More Time to Prepare if CECL Deadline Extended
To address areas of uncertainty brought on by stakeholders, the Financial Accounting Standards Board (FASB) met in August and issued a proposed accounting standard update that would amend the transition requirements for non-public community banks. Under the current guidance, implementation for the Current Expected Credit Loss (CECL) model is required for fiscal years beginning after December 15, 2020. With the proposal, this date would be pushed back to fiscal years beginning after December 15, 2021, resulting in an implementation date of January 1, 2022 for fiscal-year-end community banks.
The proposed change will not have an impact on any of the current applicable guidance or requirements under CECL. Overall, it is an attempt to mitigate the complexities of transitioning to the new CECL modeling standards with which many stakeholders have reported difficulties in obtaining applicable data.
The proposal additionally clarifies that receivables resulting from operating leases are to be accounted for within the new lease accounting standards.
FBLG is currently developing a variety of basic CECL templates to distribute to clients and friends within the banking industry. We will continuously update the templates as we collect feedback from bank regulators and other experts. If you would like to use our templates as starting point in developing your own specific analysis, please contact us.
"Items to Consider with the New CECL Requirements" published 6/19/2018
"Regulatory Agencies Issue FAQs Update on CECL" published 9/28/2017