October 04, 2018

NAFCU talks CECL issues, implementation today

CECLNAFCU today will participate in a discussion on the upcoming implementation and current issues regarding credit unions' compliance with the current expected credit loss (CECL) accounting standard with the American Institute of Certified Public Accountants (AICPA). Of note, today's meeting, with the AICPA's Depository Institutions Expert Panel, will cover the recently clarified CECL effective date for non-public business entities, which includes credit unions.

NAFCU Chief Economist and Vice President of Research Curt Long and Senior Regulatory Affairs Counsel Ann Kossachev will attend today's meeting.

In August, the Financial Accounting Standards Board (FASB) issued a request for feedback on its proposed update to the current CECL effective date for non-public business entities, making clear that the implementation of the standard is only required for fiscal years after Dec. 15, 2021. The FASB's proposal would also clarify that operating lease receivables are not covered within the scope of CECL – a clarification welcomed by NAFCU.

In comments shared with FASB last month, NAFCU noted its appreciation for the clarifications provided, including those pertaining to the effective date for credit unions, but reiterated its position that the industry should never have been included within the scope of the CECL standard in the first place.

Today's meeting will also cover issues sent to FASB for its Transition Resource Group, any future guidance on CECL, auditing the standard and any additional issues on the horizon.

Credit unions can learn more about some of the key qualities and trade-offs under various CECL implementation models in a study NAFCU released last year.