Smaller Banks Receive Extension on Implementing Credit Loss Standard
After repeated calls for a delay of its new credit loss standard , the Financial Accounting Standards Board (“FASB”) has agreed to give smaller banks an extra year to comply with Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. FASB chairman Russell Golden said the board had always intended to provide these nonpublic business entities additional time to adopt the ASU, but the language insinuated that financial institutions like credit unions and community banks did not have as much time to prepare as was initially envisioned. Golden acknowledged the confusion smaller banks had in implementing ASU No. 2016-13, stating. Read More.
Insurers Seek Extension of Insurance Standard’s Effective Date
Principal Financial Group and the American Council of Life Insurers want the Financial Accounting Standards Board (“FASB”) to delay the effective date of its proposed insurance standard by at least one year. In separate letters to the FASB, the insurance companies argue a lack of resources and the need to overhaul existing systems will prevent them and other insurers from implementing the accounting changes before the projected 2021 effective date for public companies. The FASB is currently reviewing the delay request. In the meantime, the board is targeting an August release for its final amendments to guidance concerning insurance company-issued long duration contracts . Based on a proposed Accounting Standards. Read More.
AICPA and Credit Union Advocate Seek New Credit Loss Standard Effective Date
Despite non-public entities already receiving an extra year to comply with the Financial Accounting Standards Board’s (“FASB”) new credit loss standard, the American Institute of Certified Public Accountants (“AICPA”) and the Credit Union National Association (“CUNA”) seek another extension. Both organizations want the FASB to amend the effective date of Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as well as give privately held banks and credit unions until January 1, 2022, to implement the guidance. Non-public businesses like private community banks and credit unions must apply the new. Read More.
Topics: Accounting Standards Update "ASU", AICPA, Community Banks, Credit Loss Model "CECL", Credit Union National Association, Credit Unions, FASB, FASB credit loss standard, Financial Instruments - Credit Losses (Topic 326)
CAQ Issues Audit Planning Alert
The Center for Audit Quality (“CAQ”) has issued an alert to improve audit quality and assist in the planning of 2018 audits. Released as Audit Planning Alert for Auditors of Brokers and Dealers , the alert outlines questions auditors of brokers and dealers should consider when preparing audit and attestation engagements. It also focuses on the following areas: Auditing revenue; Auditing related party transactions; Auditing the supplemental information; Performing examination engagements; and Performing review engagements. While certain areas are highlighted in this alert, the CAQ cautions that the guidance should not be considered definitive or all-inclusive. The CAQ advises that the alert must be read alongside the appropriate rules,. Read More.
President Signs Bill that Reverses Dodd-Frank Banking Reforms
President Trump has signed a bill to roll back systemic risk regulations under the Dodd-Frank Act. Approved on May 22 by the House of Representatives, the Economic Growth, Regulatory Relief, and Consumer Protection Act (“the Act”) represents the most substantial changes to the Dodd-Frank Act since its enactment. The new legislation is viewed as a partial rollback of the 2010 law. Although heralded in the media as a dramatic step away from regulatory reforms introduced by Dodd-Frank, the changes included in the Act will generally have the greatest impact on small banks. Sen. Mike Crapo praised the legislation as a. Read More.
FASB Deems Regulatory Guidance from Financial Services Standard Irrelevant
The Financial Accounting Standards Board (“FASB”) has published a small U.S. GAAP update that removes decades-old bank regulatory guidance from its financial services standard. Accounting Standards Update No. 2018-06, Codification Improvements to Topic 942: Financial Services—Depository and Lending, eliminates a reference to the Office of the Comptroller of the Currency’s Banking Circular 202, Accounting for Net Deferred Tax Charges, from FASB Accounting Standards Codification 942-740-45-1, Financial Services—Depository and Lending—Income Taxes — Other Presentation Matters — Differences Between Regulatory Accounting Principles and GAAP. Published in 1985, the guidance has since been rescinded. Per the FASB, the Codification guidance related to the. Read More.