WASHINGTON–The Financial Accounting Standards Board (FASB) has agreed to propose a credit union-backed change to its current expected credit losses (CECL) standard.
FASB made the announcement at its latest board meeting.
CUNA noted it earlier wrote to FASB in May urging it to clarify CECL’s effective date for credit unions. “During the meeting, FASB Chairman Russell Golden agreed with comments in our letter that FASB originally intended to provide credit unions and similar types of entities additional time to implement the standard,” CUNA said.
“While FASB staff has not yet released the details of the proposed change, based on discussion during the meeting, CUNA expects expect the clarification will fully remedy the issue,” CUNA said in a statement.
CECL was adopted in June 2016, and uses an “expected loss” measurement for the recognition of credit losses.
FASB intended to create tiered effective dates to provide implementation flexibility for smaller and less complex financial institutions, a move CUNA said it supported.
“While FASB appears to have sought to provide additional implementation time for non-public business entities (PBE), the standard as originally issued effectively required non-PBEs to adopt the standard at the same time. State and federal chartered credit unions are considered non-PBEs,” the trade group said in a statement. “CUNA’s letter supported a recommendation from the American Institute of Certified Public Accountants, who called for clarity regarding non-PBEs.”
The board will accept public comment for 30 days on its proposal.