FASB Proposes Technical Corrections to CECL

The Financial Accounting Standards Board today issued an exposure draft of an accounting standards update that would make technical corrections to the Current Expected Credit Loss accounting standard. The corrections provide clarifications that nonpublic business entities are required to implement CECL in 2022 (as opposed to Dec. 31, 2021). This correction will reduce transition complexity and save non-PBEs from having to run both CECL and incurred loss methods throughout 2021.

The update also clarifies that receivables arising from operating leases are not within the scope of CECL. Comments on the exposure draft are being accepted until Sept. 19.