FASB Decision on CECL Delay
On October 16, 2019, the FASB held a board meeting to discuss the comment letters surrounding the proposed extension to the adoption date of CECL. The board unanimously voted to adopt the language in the exposure draft, which extends the effective date of CECL to 1/1/2023 for many calendar year end entities. The exact wording of the effective dates are below, including who meets the requirement of the extension.
Under the revised effective date philosophy, the mandatory effective dates for CECL would be amended to the following:
- Public business entities that meet the definition of an SEC filer, excluding entities eligible to be Small Reporting Companies as defined by the SEC, for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years
- All other entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years
Additional discussion by the FASB board today surrounded the following areas:
- FASB is willing to explore a “higher cut” than SRC in the future, such as non-accelerated filers, but with the changes the SEC has proposed to those definitions, they don’t feel comfortable making decisions until the SEC has resolution on their proposal.
- The extension definition would not exclude broker dealers of any type, however they said they are not “closing the door” to a possible future extension to this or other standards
Please note this was vote was for the approval of a standard to be written, but the actual ASU has not technically been released yet. We expect the official ASU to be issued in the next few weeks.
Joshua Juergensen is a principal with CLA. He works with banks and credit unions nationwide, managing audit engagements, directors’ exams, external loan file reviews, internal audits, and other consulting services.
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