DURHAM, N.C.–The American Institute of CPAs’ Financial Reporting Executive Committee has issued a working draft of accounting issues related to the implementation of Accounting Standards Update (ASU) No. 2016-13, Financial Instruments-Credit Losses, and is requesting feedback on issue paper Reasonable and Supportable Forecasting.
The AICPA noted the Current Expected Credit Loss, or CECL, will be the new standard and will change how financial institutions account for expected credit losses.
“It is the most significant change to financial institutions in forty years,” the AICPA said. “It affects reserves for losses over loans booked and allows for more forward-looking information to be considered when developing a best estimate.”
The working draft discusses helpful considerations for Depository and Lending Institutions, and Insurance Companies and is available here.
“This project demonstrates the AICPA’s continuing effort to ease implementation of the standard for auditors and their clients,” said Jason Brodmerkel, CPA, Accounting Standards – Depository and Lending Institutions for the AICPA. “It is a tremendous effort for our committee and the many volunteers on our task force all of whom are committed to help the financial reporting system adopt the standard.”
Interested parties are encouraged to submit their informal feedback on the implementation issue by Dec. 31, 2018.