The Financial Accounting Standards Board issued an accounting standards update today to allow non-public business entities to implement CECL on Jan. 1, 2022, instead of Dec. 31, 2021, as originally required. The one-day change effectively gives the qualifying entities an additional year to implement CECL. The American Bankers Association has long advocated for this extension and previously identified challenges with the original effective date for non-PBEs in a white paper.
ABA maintains that the need for this correction indicates that the CECL standard was issued without sufficient due diligence, and that CECL will have far-reaching implications for banks and consumers that were either unintended or not sufficiently understood when the standard was issued. The association continues to call on FASB and the banking agencies to study the effects the CECL standard will have on the industry.