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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.

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Banks Urged to Prepare for FASB Credit Loss Standard

Banking institutions are advised to act fast on implementation plans for Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326). At the AICPA National Conference on Banks and Savings Institutions last week, Louis Thompson of the Office of the Comptroller of the Currency told depository institutions to start preparing for the Financial Accounting Standards Board’s (“FASB”) current expected credit loss (“CECL”) standard. Thompson emphasized that due to the substantial changes in writing down bad loans and securities, implementation efforts should require full commitment and cooperation to ensure the new guidance is applied in a disciplined and. Read More.

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FASB Publishes Landmark Credit Loss Standard

The Financial Accounting Standards Board (“FASB”) has issued Accounting Standards Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . Published on June 16, the amendments represent the most significant change to the FASB’s guidance for writing down bad loans and securities. The updated guidance has also been added to U.S. GAAP under Topic 326, Financial Instruments—Credit Losses. This ASU removes the “probable” requirement for recognition of credit losses. The 2008 financial crisis was frequently blamed for delayed recognition of impaired loans. The new current expected credit loss (CECL) model allows entities to recognize the full amount of credit losses that are expected based on both historical and forward looking information.. Read More.

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