Removing Barriers Blog

FASB Makes Clarifying Changes to CECL
Posted August 31, 2018 by CUNA Advocacy

During its Board meeting this week, FASB addressed several operational issues related to the CECL (current expected credit loss) accounting standard. The issues were brought to the Board’s attention during a June meeting of FASB’s Transition Resource Group (TRG) on Credit Losses. The TRG, which includes credit union and other financial institution representation, has an ongoing mandate to examine CECL and alert potential problems with implementation to the Board so it can address those issues.

This week, the FASB Board addressed the following issues raised by the TRG:

  • Capitalized Interest;
  • Refinancing and Loan Prepayments;
  • Inclusion of Accrued Interest in Defining Amortized Cost Basis;
  • Reversal of Accrued Interest on Non-accrual Loans;
  • Transfers of Loans and Debt Securities between Categories; and
  • Recoveries.

While the Board determined that not all of these issues warranted changes, it did agree that some needed clarification. See FASB’s Tentative Board Decision document for the specific changes.