On May 16, three YHB partners participated in an ABA Accounting Administrative Committee meeting to discuss with regulators, the SEC, PCAOB and FASB the challenges community banks are facing in implementing CECL. Today, our voice was heard.
Upon a majority vote of the Financial Accounting Standards Board (FASB) members, the FASB voted to delay the required implementation date of the new credit losses standard (ASU 2016-13) to 2023 for smaller reporting companies filing with the Securities and Exchange Commission (SEC) as well as public business entities who do not file with the SEC and all other entities. The delay in implementation resulted from the Board’s consideration of several factors facing smaller entities including the availability of resources, education, and the development of systems and internal controls to address implementation, among others.
At this juncture, all SEC filers not meeting the definition of a smaller reporting company will retain the current effective date of January 2020 for implementation of the credit losses standard. It is expected that FASB will have a question in the exposure draft as to whether the delay in implementation should include all entities, with the exception of large accelerated filers. In the interim, FASB has issued an additional Q&A on the new credit losses standard addressing the use of historical information, making reasonable and supportable forecasts, and the reversion to historical loss information.
The FASB also proposed an amendment to the effective date for the new lease standard for non-public business entities to January 2021. Please contact any member of the YHB Bank Team with questions. We will keep you posted with any further developments.
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