FASB Denies Delaying CECL, but TDR Dropped if CUs Adopt It

Logo for the Financial Accounting Standards Board (FASB)

The Financial Accounting Standards Board (FASB) met on Feb. 2 and voted to deny the requests for deferring the adoption of the current expected credit loss (CECL) accounting model for nonpublic entities, which includes credit unions.

Therefore, credit unions must be ready to comply by Jan. 1, 2023, which is the mandatory CECL implementation date.

To assist credit unions in their preparation, the California and Nevada Credit Union Leagues is finalizing educational programs to provide scaled and timely resources for the implementation of CECL. Additional details will be provided soon.

TDR Accounting Guidance Eliminated for Some
Also of note: FASB voted to draft a final update eliminating the troubled debt restructuring (TDR) accounting guidance for creditors who have adopted the CECL standard.

The update also requires more detailed disclosure about modifications of receivables made to borrowers experiencing financial difficulty. Credit unions are required to comply with CECL for fiscal years beginning after Dec. 15, 2022.

The Leagues will continue to monitor any notable changes regarding CECL and FASB and provide credit unions with necessary updates.

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