CPAs and Advisors with Your Growth in Mind

Banks and Trade Groups Want More Time to Implement FASB Credit Loss Standard

A few months have passed since bank regulators introduced a proposal to alleviate the regulatory capital impact of the Financial Accounting Standards Board’s (“FASB”) credit loss standard. Several banks and trade groups, however, believe more time is needed to examine the effects of Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In comment letters to regulators, individual banks and trade groups propose extending the phase-in period of the standard from three years to five years. Representatives from groups like the Independent Community Bankers of America said that the. Read More.

Topics: , , , ,

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: , , , , , , , ,

Amended Capital Rule for FASB Credit Loss Standard Proposed

The Federal Reserve, Office of the Comptroller of the Currency, and Federal Deposit Insurance Corporation have proposed amending regulatory capital rules to improve consistency among bank regulation and the Financial Accounting Standards Board’s credit loss standard. Issued as Regulatory Capital Rules: Implementation and Transition of the Current Expected Credit Losses Methodology for Allowances and Related Adjustments to the Regulatory Capital Rules and Conforming Amendments to Other Regulations, the proposal would give banks the choice to phase-in the capital impacts of implementing Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial. Read More.

Topics: , , , ,

FASB Agrees on Guidance for Troubled Debt Restructurings

The Financial Accounting Standards Board (“FASB”) plans to clarify its guidance for troubled debt restructurings under Accounting Standards Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. During its September 6 meeting, the FASB agreed that lenders should assess the impact of the restructuring when the individual troubled loan is known. In certain situations, banks are free to make estimates based on historic data, which the FASB refers to as a “portfolio-level” approach. FASB member Christine Botosan remarked that the decision allows banks to estimate troubled debt restructurings earlier, wherein the estimation. Read More.

Topics: , , , , ,

Bank Regulators Add Guidance for FASB Credit Loss Standard

Several bank regulators have updated their interpretive guidance regarding the Financial Accounting Standards Board’s (“FASB”) credit loss standard. The revised guidance from Federal Deposit Insurance Corporation, Federal Reserve, the National Credit Union Administration, and the Office of the Comptroller of the Currency will be added to the December 2016-published frequently asked questions document that explains why the FASB issued Accounting Standards Update No. No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new guidance addresses how to handle subjective information when banks estimate their loss reserves when applying ASU No. 2016-13. In. Read More.

Topics: , , , , , , , , ,

Banks Express Concerns over FASB Credit Loss Standard

Banking institutions of all sizes are preparing to implement the Financial Accounting Standards Board’s (“FASB”) new standard that requires the calculation of future losses on bad loans versus disclosing losses that have already occurred. While the largest accounting update in years for banks requires an additional workload, some lenders are uncertain about how to sift through their data for estimating future losses and setting aside cash reserves. At the American Institute of Certified Public Accountants’ National Conference on Banks & Savings Institutions last week, Federal Savings Bank executive vice president and CFO James Brannen touched on the difficulties a small. Read More.

Topics: , , , , ,