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 the credit loss standard beginning in 2022.