Also at its Wednesday meeting, FASB agreed that its proposed Current Expected Credit Loss standard for impairment of loans and debt securities will become effective during 2019 for SEC registrants and 2020 for all other companies. In the meantime, ABA is working closely with FASB members and staff in addressing the costs and complexity of the CECL model for community banks.
FASB received more than 950 comments from bankers, regulators, auditors and ABA, who together identified 147 “fatal flaws” in the draft standard. FASB hopes to address the comments, which identify both high-level conceptual issues as well as specific issues, such as accounting for troubled debt restructurings and purchased loans, through meetings over the next month and through editing the wording in the text. A final standard is expected in February. For more information, contact ABA’s Mike Gullette.