ARLINGTON, Va.—NAFCU has sent a letter to the Financial Accounting Standards Board (FASB) sharing the association’s response to the Proposed Accounting Standards Board Update that eliminates accounting guidance for troubled debt restructurings (TDR) and enhances certain disclosure requirements.
While NAFCU said it generally supports FASB’s proposal to eliminate the accounting guidance for TDRs, the association strongly urged FASB to “accelerate the effective date of TDR elimination as optional for non-public entities as early as the annual period beginning after December 15, 2021,” wrote Regulatory Affairs Counsel James.
Non-public entities have successfully maintained sufficient loan loss allowance levels without TDR accounting guidance and will likely be able to continue doing so moving forward, NAFCU said.
Akin also discussed the redundancy of TDR accounting guidance, sharing financial institutions’ track records of success in voluntarily disclosing information in the absence of TDR guidance during the pandemic.
As for the new current expected credit losses (CECL) standard, NAFCU again called on FASB to eliminate the adoption of CECL, citing “major credit union concerns” with the accounting standard.