FASB Proposal: Delay of Effective Date of CECL, Derivatives and Hedging, and Leases

FASB Proposal: Delay of Effective Date of CECL, Derivatives and Hedging, and Leases

FASB has issued an exposure draft for public comment regarding the effective dates of several different standards as they apply to each type of reporting entity. Under the proposal, as it applies to credit unions, the plan would:

  • Delay CECL until 1/2023
  • Delay leasing until 1/2021
  • Delay hedging until 1/2021

In addition, the proposal would change the current three bucket effective date structure of CECL to a two-bucket structure. Currently, the standard differentiates between public business entities that are SEC filers, public business entities that are not SEC filers, and non-public business entities (which includes credit unions). The new approach would differentiate between SEC filers except for SRCs (smaller reporting companies - as defined by the SEC), and all others (which would include credit unions). The chart below shows the current vs proposed effective dates.

CECL Delay

FASB comment deadline: September 16, 2019

Questions to Consider

  1. Do you support the proposed delay as it applies to CECL? Why or why not?
  2. Do you support the proposed delay as it applies to derivatives and hedging? Why or why not?
  3. Do you support the proposed delay as it applies to leases? Why or why not?
  4. Will the proposed delay provide sufficient time for your credit union to prepare for implementation of CECL (e.g., collect necessary data and make required system updates)? If not, how much time is necessary for these changes?
  5. Any other relevant comments or concerns that would be appropriate for CUNA to share with FASB as they relate to CECL and/or the other standards addressed in the proposed delay?