The Financial Accounting Standards Board (FASB) officially finalized the delay for implementation of the current expected credit loss (CECL) standard to January 2023 Friday. The board agreed to the delay in October and Friday’s action makes it official.
CECL is a new accounting standard that uses an “expected loss” measurement for the recognition of credit losses. CUNA is concerned about its effect on credit unions, both from a compliance standpoint (credit unions have listed it as a top challenge) and its impact on the financial standing of credit unions.
Specifically, FASB’s decision creates two groups with different implementation dates: Securities and Exchange Commission filers (except for small reporting companies as defined by the SEC) and all others, including credit unions.
CUNA has partnered with FASB for a Dec. 19 webinar on a CECL implementation workshop. The 90-to 120-minute workshop is an interactive session with FASB staff focusing on credit loss reserve estimation techniques, including the weighted average remaining maturity (WARM) method, answers to frequently asked questions and other common implementation issues credit unions may face.