CUNA supports a proposed accounting standards update from the Financial Accounting Standards Board (FASB), it wrote FASB in late December. The proposed update would eliminate Troubled Debt Restructuring (TDR) accounting requirements for those entities that have adopted the current expected credit loss (CECL) standard.
CECL is an accounting standard that recognizes lifetime expected credit losses.
We believe the TDR designation and disclosure will likely no longer be meaningful after the adoption of [CECL] because lifetime credit losses have already been captured credit losses have already been captured under the current expected credit losses (CECL) model and overlap with certain disclosure requirements,” the letter reads. “
CUNA also supported the remarks in the proposal citing the high cost and complexity associated with determining whether a modification represents a TDR and further measuring the effect of the TDR on an allowance for credit losses.