WASHINGTON—Financial regulators have released a new current expected credit loss (CECL) FAQ document to help institutions implement the standard.
The Financial Accounting Standards Board (FASB) also indicated it won't move forward with a proposal put forward by a group of banks outlining an alternative to the income statement impact of the standard, NAFCU reported.
The 43-page FAQ document was issued by the NCUA, Federal Reserve, Office of the Comptroller of the Currency and FDIC. It addresses a variety of issues, including effective dates, methods, qualitative factors, third-party vendors, supervisory expectations and more. Access the document here.
FASB made the decision during its meeting this week. It determined that the proposal would not result in an incremental improvement and that the proposal was operationally complex and could result in added costs for preparers and auditors, NAFCU explained.
Burden Discussed
FASB also discussed the burden of creating more detailed disclosures to accommodate the proposal and their expectation for increased scrutiny of management's decision to bifurcate the credit loss provision between the income statement and accumulated other comprehensive income (AOCI), NAFCU noted.
In addition, during the FASB meeting the board agreed that entities should follow the codification guidance, rather than what is illustrated in Example 15 relative to gross write-offs and gross recoveries, when preparing certain credit quality disclosures.
“This provides some relief for preparers,” NAFCU said.