FASB Discusses ‘CECL’ Implementation with CUs

Senior staff from the Financial Accounting Standards Board (FASB) address REACH attendees during the "Spark Session."
Senior staff from the Financial Accounting Standards Board (FASB) address REACH attendees during the "Spark Session."

In a rare opportunity, attendees during the California and Nevada Credit Union Leagues’ annual convention had the opportunity to hear directly from the staff of the Financial Accounting Standards Board (FASB) last week regarding the board’s Current Expected Credit Loss (CECL) rule as it relates to credit unions.

FASB staff engaged with credit union leaders on CECL issues, including calculating the Weighted Average Remaining Maturity (WARM) method and other questions regarding implementation of the upcoming CECL standard.

On Oct. 16, FASB affirmed its decision to provide additional implementation time, setting the effective date for credit unions to Jan. 1, 2023. This allows credit unions the ability to learn from the implementation processes of larger public entities.

Credit unions will have more time to conduct extensive testing to determine the methodology that is most appropriate for their credit union and to adequately prepare for the resulting impact to their reserve requirements.

Credit union leaders engaged with FASB leadership during the REACH “Spark Sessions” to gain better insight as the industry continues preparing for the CECL rule.

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