NEW YORK (August 15, 2019) – The AICPA’s Financial Reporting Executive Committee (FinREC) has issued working drafts of accounting issues related to the implementation of Accounting Standards Update (ASU) No. 2016-13, Financial Instruments-Credit Losses and is requesting feedback on issue paper Reasonable and Supportable Forecasting.
Current Expected Credit Loss, or CECL, is a new standard that will change how financial institutions account for expected credit losses and, is one of the most significant changes to financial institution accounting in 40 years. It affects reserves for losses over loans booked and allows for more forward-looking information to be considered when developing a best estimate.
The working drafts discuss helpful considerations for Depository and Lending Institutions, and Insurance Companies and are available at:
- Issue #21: Inclusion of Future Advances of Taxes and Insurance Payments
- Issue #23: Zero Expected Credit Loss Factors for Secured Financial Assets Secured by Collateral
- Issue #28: Scope Exception for Loans and Receivables between Entities under Common Control
“These issue papers demonstrate the AICPA’s continuing effort to ease implementation of the standard for auditors and their clients,” said Jason Brodmerkel, CPA, AICPA accounting standards – depository and lending institutions. “It is a tremendous effort for our committee and the many volunteers on our task force all of whom are committed to help the financial reporting system adopt the standard.”
Interested parties are encouraged to submit their informal feedback on the implementation issues to Jason Brodmerkel at Jason.Brodmerkel@aicpa-cima.com by October 15, 2019.
Final issues will be included in a new AICPA CECL A&A guide.