FASB agrees on CECL Delay
The Financial Accounting Standards Board (FASB) today voted to propose a delay in the implementation deadline of the new Current Expected Credit Loss (CECL) accounting standard for all private companies and for small public companies.
As a result of the new FASB vote, the CECL standard wouldn't take effect until January 2023 for financial institutions and credit unions that fall under the proposal. Public companies with a market cap below $250 million and annual revenue of less than $100 million are also included. The CECL standard would still take full effect for larger public companies in January 2020.
Politico reported that the full proposal that contains the delay provision is expected to be put out for public comment by mid-August with a 30-day comment period, and the document will likely be finalized in the fall, according to FASB spokesperson Christine Klimek.
AFSA has continually raised concerns about the potential negative consequences of the new CECL standard on the economy and cost and availability of important financial products.
While AFSA applauds FASB for taking this initial step by providing additional time for smaller financial institutions to comply with this new standard, we still maintain that a quantitative study on the consequences of such fundamental accounting changes on consumers, financial institutions, and the broader U.S. economy should be conducted before financial institutions of any size are required to implement the CECL model.
AFSA remains supportive of H.R. 3182, a bipartisan bill that would delay the implementation of the standard until one year after a quantitative impact study is completed, as detailed in a June 20th letter.
July 17th, 2019 by Dan Bucherer