Newsroom
FASB to address additional CECL concerns
During a Financial Accounting Standards Board's (FASB) Transition Resource Group for Credit Losses meeting Thursday, FASB staff indicated it would spend additional time working on certain operational challenges associated with the current expected credit loss (CECL) standard.
These concerns were brought up by credit unions and other financial institutions attending the meeting. NAFCU Senior Counsel for Research and Policy Andrew Morris was also at Thursday's meeting to help convey credit unions' concerns and gain further insights on issues that might arise when implementing the standard.
FASB recently agreed to proceed to a vote to finalize NAFCU-sought changes, including a delay in the standard's effective date for the industry. The changes would make clear that the implementation of the standard for non-public business entities (PBEs) is only required for fiscal years after Dec. 15, 2021 – so credit unions would not need to begin reporting data on call reports until the beginning of 2022 – and would also clarify that operating lease receivables are not covered within the scope of CECL – a clarification welcomed by NAFCU.
A final update is expected to be issued before the end of the year.
Credit unions have repeatedly expressed a need for more substantive guidance on the CECL standard; NAFCU continues to urge the FASB to coordinate with the NCUA on guidance. Morris last week sent a letter to the NCUA outlining NAFCU's efforts to help address credit unions' CECL concerns and encouraged the agency to work with FASB "to reduce burdens on credit unions and alleviate industry uncertainty."