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SEC Chairman Says FASB Should Decide on Credit Loss Standard Delay

With pressure mounting for the Financial Accounting Standards Board (“FASB”) to postpone implementation of Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, Securities and Exchange Commission (“SEC”) chairman Jay Clayton is tiptoeing around the prospects of a delay. Talking to reporters at a recent conference, Clayton said while his agency oversees standard-setting organizations, it is ultimately up to the FASB to decide whether delaying the credit loss standard is necessary. His remarks come as banks and trade groups have asked for more time to implement ASU No. 2016-13 . Banking groups like the Mortgage Bankers Association and the Bank Policy Institute are concerned over the costs to comply with the standard.. Read More.

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Mortgage Bankers Association Wants a Delay in Credit Losses Standard

Another banking group wants the Financial Stability Oversight Council (“FSOC”) to postpone the effective date of Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In a letter last month, the Mortgage Bankers Association (“MBA”) urged the FSOC to complete a quantitative impact study to examine the effects of the Financial Accounting Standards Board’s (“FASB”) credit losses standard. The MBA considers the study critical to helping banking agencies, banks, and others understand the standard’s full impact and any unanticipated effects. Echoing concerns from the Bank Policy Institute , the MBA says the credit losses standard. Read More.

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Bank Regulators Propose Phase-in Implementation of Credit Loss Standard

As banks, industry groups, and others continue to raise concerns over Accounting Standards Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, three bank regulators have a plan to reduce the capital effects of the Financial Accounting Standards Board’s credit loss standard. The Federal Reserve, Office of the Comptroller of the Currency, and Federal Deposit Insurance Corporation have proposed a phased-in implementation of the current expected credit loss model. Over a three-year period, banks could phase in the standard’s adverse effects on regulatory capital when they implement the new accounting guidance. This phase. Read More.

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Update Pushes Credit Loss Standard Effective Date to 2022 for Community Banks

After unanimously approving last month several amendments to Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326) , the Financial Accounting Standards Board (“FASB”) published an update that will give credit unions and community banks an extra year to comply with the credit loss standard. The update, ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, aligns the implementation dates for private companies’ annual financial statements with their interim financial statements. The new guidance states that private companies must apply the credit loss standard to fiscal years, including interim periods within such years, starting after December 15, 2021. This change means smaller institutions like credit unions and community banks can apply. Read More.

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Credit Loss Standard Effective Date Delayed for Community Banks and Credit Unions

An upcoming clarification to the Financial Accounting Standards Board’s (“FASB”) credit loss standard ensures that credit unions and small banks will get an extra year to implement Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326). By a unanimous vote on October 24, the FASB confirmed several amendments under Proposed ASU No. 2018-270, Codification Improvements to Topic 326, Financial Instruments—Credit Losses. The proposed changes include merging the implementation dates for private companies’ annual financial statements and their interim financial statements. Private companies must apply the standard for fiscal years, as well as interim periods within such years, starting. Read More.

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Regulators to Offer Flexibility on FASB Credit Loss Standard

When it comes to the Financial Accounting Standards Board’s (“FASB”) credit loss standard, Federal Reserve chief accountant Joanne Wakim said regulators want to give banks flexibility when estimating their expected losses on loans and securities. At the American Institute of Certified Public Accountants’ National Conference on Banks and Savings Institutions this week, Wakim echoed the FASB’s statements that there is no single method to help banks estimate loan losses, and financial institutions should take several factors into account. She also said banks could continue to use current methodologies with changes to inputs and assumptions. Further, Wakim said regulators will not. Read More.

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