FDIC to Offer Alternate Measurement Date for Determining Compliance Requirements for FDICIA Part 363 Annual Reporting
On October 20, 2020, the FDIC issued an interim final rule (IFR) which provides insured depository institutions (IDIs) with the option of using an alternate measurement date for purposes of determining annual reporting requirements under Part 363 of FDICIA regulations.
For fiscal years ending in 2021, IDIs whose consolidated total assets exceed either of the two FDICIA reporting thresholds of $1 billion and $500 million may elect to determine their FDICIA Part 363 Annual Audit and Reporting Requirements based on the lesser of (a) consolidated total assets as of December 31, 2019 or (b) the first day of their fiscal year ending in 2021. This alternative measurement date option will likely benefit IDIs that exceeded or are expected to exceed a FDICIA reporting threshold through their participation in the Paycheck Protection Program (PPP) and other government stimulus programs.
The optional measurement date is available to all institutions although the FDIC reserves the right to require IDIs to comply with certain requirements under Part 363 if the FDIC determines asset growth was related to a merger or acquisition. All other regulatory and statutory reporting requirements remain in effect. This IFR becomes effective immediately upon its publication in the Federal Register, and will remain effective through December 31, 2021.
This rule provides welcome relief to institutions whose PPP loans and other stimulus-related assets push them above the $500 million or $1 billion mark or who may not have participated in government stimulus programs because they would not be prepared to implement the increased reporting and/or internal control requirements of Part 363.
For more information contact your BNN advisor. You can access a complete listing of Part 363 reporting requirements here and the entire IFR here.
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.