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)
Smaller Banks Can Avoid Using Complex Models in Calculating Loss Reserves
Community bankers could be exempt from using the complex models necessary to comply with the Financial Accounting Standards Board’s (“FASB”) credit loss standard. Banking regulators said that the current expected credit loss model under Accounting Standards Update (ASU) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, is flexible enough that smaller lending institutions are not required to purchase expensive software or use complex modeling techniques to meet the standard’s provisions for calculating loss reserves. During a February 27 webcast, the Federal Reserve’s Joanne Wakim stated that small banks could calculate loss reserves. Read More.
Senate Bill Gives Sarbanes-Oxley Exemption to Small Banks
Banks holding less than $1 billion in assets could receive an exemption from the auditor attestation requirements of Section 404(b) under the Sarbanes-Oxley Act of 2002. Under S. 1962, the Community Bank Access to Capital Act of 2017, the proposed Senate bill frees smaller banks from the more complicated and expensive reforms under Sarbanes-Oxley. S. 1962 also requires public companies to hire an external auditor to attest to management’s internal controls over financial reporting. The bill’s co-sponsor, Senator Mike Rounds (R-S.D.), stated the proposed measure would promote growth among community banks and help them support their communities. Section 404(b) advocates. Read More.
FDIC Issues Guide for Community Banks
Published by the Federal Deposit Insurance Corporation (“FDIC”), the New Capital Rule Community Guide (the Guide) summarizes important changes from the present general risk-based capital rule for exposures normally held by community banking organizations. The Guide is aimed to assist small, non-complex community banks with parts of the capital rule important to their operations. Effective January 1, 2015, sections of the new capital rule were adopted recently by federal banking agencies. The PDF of the Guide is available for download on the FDIC’s website. Don’t forget that Cherry Bekaert is also available to provide community banks guidance regarding the new capital rule. If you are interested,. Read More.