FASB delays CECL effective date one year
On April 27, 2016, the Financial Accounting Standards Board (FASB) decided that the effective dates for the financial instruments – impairment standard, commonly known as the Current Expected Credit Loss Model (CECL), should be delayed for one year to allow for an adequate amount of time for entities to prepare for adoption. As such, the new effective dates are as follows:
Financial Institutions that are public business entities but meet the definition of an SEC filer will be required to apply the guidance for fiscal years beginning after Dec. 15, 2019, including interim periods within that year. Therefore, adoption must be in place for the March 31, 2020 Form 10Q filing for calendar year end companies.
Financial institutions that are public business entities but do not meet the definition of an SEC filer will be required to apply the guidance for fiscal years beginning after Dec.15, 2020, including interim periods within those fiscal years. Therefore, adoption must be in place for the March 31, 2021 call report filing for calendar year end companies.
All other financial institutions with calendar year ends must adopt the guidance for the Dec. 31, 2021 call report and financial statements.
Early adoption is allowed for periods beginning after Dec. 15, 2018.
The FASB has deliberated many aspects of the 2013 exposure draft for the last three years, making several decisions as a result of feedback received, but has yet to issue a final standard. The board revisited the effective dates released in the fourth quarter of 2015 due to the additional time needed to deliberate the standard and the results of the fatal flaw review last September.
As the FASB continues to deliberate the CECL standard, Plante Moran advisors are available to help financial institutions understand the current status of the standards and implement the changes.
