On June 16, 2016, the Financial Accounting Standards Board issued a final standard related to the financial instruments – impairment project, which is commonly referred to as the current expected credit loss (CECL) model. Considering this new standard is arguably the largest change in accounting for financial institutions in more than 30 years, it will take time for the industry to fully comprehend and adopt it.
The effective dates for this new standard are as follows:
- SEC filer adoption
Public business entities that meet the definition of an SEC filer will be required to apply the guidance for fiscal years beginning after Dec. 15, 2019, including interim periods within that year. Therefore, adoption must be in place for the March 31, 2020 Form 10Q filing for companies operating on a calendar year. - Non-SEC filer adoption
Public business entities that do not meet the definition of an SEC filer will be required to apply the guidance for fiscal years beginning after Dec. 15, 2020, including interim periods within those fiscal years. Therefore, adoption must be in place for the March 31, 2021 call report filing for companies operating on a calendar year. - Nonpublic entities
All other entities operating on a calendar year must adopt the guidance for the Dec. 31, 2021 call report and financial statements.
Throughout the adoption period and beyond, count on your Plante Moran advisors to help you understand this new standard and its impact on your institution. Click here to register for our first in a series of webinars on the topic.
