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FASB to meet and discuss CECL, TDR today
The Federal Accounting Standards Board (FASB) will hold a board meeting today to discuss troubled debt restructuring (TDR) accounting for creditors who have adopted the current expected credit loss (CECL) standard.
FASB received feedback prior to a roundtable discussion on CECL held in May that indicated the cost of TDR accounting for CECL adopters and generating the required disclosures for TDRs may not justify the benefits.
During the roundtable, FASB staff noted challenges associated with determining whether a modification is in fact a TDR and that certain modification disclosure improvements may be better alternatives to TDR designation; however, there could be a tradeoff in terms of replacing the complexity of TDR accounting with greater complexity in modification accounting.
In addition, following the roundtable, NAFCU President and CEO Dan Berger wrote to FASB calling for a roundtable specifically for credit unions and other small financial institutions to discuss the impacts of the adoption of the current expected credit losses (CECL) accounting methodology.
The portion of the meeting dealing with TDR is scheduled to begin at 9:00 a.m. Eastern today. The association will continue to share with FASB and other stakeholders the impact CECL is having on credit unions and push for an exemption and additional relief to reduce regulatory burdens.