In response to the Financial Accounting Standards Board’s recent elimination of accounting guidance for troubled debt restructurings for adopters of the current expected credit loss standard, the FDIC is proposing to update the scorecard it uses to calculate assessments for large and highly complex insured depository institutions to reflect the changes.
To help community banks successfully implement the current expected credit loss accounting standard, the Federal Reserve next week will launch a second tool, the Expected Losses Estimator.
As advocated by the American Bankers Association, the Financial Accounting Standards Board today announced that it would end troubled debt restructuring accounting for companies that have already adopted the current expected credit loss accounting standard.
Earlier this week, the Financial Accounting Standards Board considered and rejected further deferral of the current expected credit loss accounting standard for those banks that have yet to adopt it.
Credit loss estimation is complicated, and CECL’s lifetime loss objective makes it even more so. While a robust quantitative impact study is still needed, this study suggests the countercyclical regulatory transition mechanism should be made permanent.
The Financial Accounting Standards Board today proposed to eliminate its accounting guidance for troubled debt restructurings, or TDRs, while enhancing certain loan disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty.
In a recent report, the PCAOB noted ongoing deficiencies in the auditing of loan losses and an increase over 2019 in deficiencies, specifically on the related internal controls auditing.
The Federal Reserve today said it plans to launch a new tool, the Scaled CECL Allowance for Losses Estimator, or SCALE, to help community banks implement the current expected credit loss standard.
Many banks have until January 1, 2023 before they must implement the current expected credit loss standard, or CECL. But it’s not too soon to start gleaning lessons from larger institutions that are already utilizing the new standard.
During a virtual roundtable hosted by the Financial Accounting Standards board today, investors, bankers and regulators expressed broad agreement on accounting alternatives related to troubled debt restructurings under CECL and acquired loans.