FASB Wants to Provide More Runway for Private Banks to Implement CECL
On July 25, 2018, the FASB agreed to propose changing the effective date of the CECL standard for private entities by one year, extending the date to apply first to fiscal years beginning after December 15, 2021.
As readers probably know, as currently written, the upcoming CECL standard applies to fiscal years ending after December 15, 2020 for both private banks (non-public business entities as defined) and public business entities, which is a departure from the FASB’s usual practice of allowing an additional year for private banks to comply.
To correct that oversight, FASB’s exposure draft, which will have a 30-day comment period, is expected to be released sometime this summer. If this proposal is indeed executed, it will certainly provide relief for a large undertaking. Despite more runway being added to provide welcome relief to the implementation timeline, we still encourage institutions to stay on top of their implementation plans and use the additional year to their advantage to gather better data, refine their methods and models, etc. rather than to push back their plans a year. For a refresher of our previously prepared timeline, you can visit BNN’s CECL toolkit on our website.
The professionals in BNN’s financial institutions practice are dedicated to remaining current with the regulatory and accounting trends impacting our clients, and to keeping our clients informed of those trends and how they might impact their businesses. Should you have questions about CECL or the implementation systems and procedures in preparation for it, please contact your BNN advisor at 800.244.7444.
Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, investment, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.
