FASB to propose a delay on credit loss rules
The leases deadline would also be delayed for private companies (and other entities, such as not-for-profits) for one year.
In their recent meeting, the Federal Accounting Standards Board (FASB) agreed to propose in August a delay to the Current Expected Credit Losses (CECL) effective date for SEC smaller reporting companies by three years, other public business entities by two years, and private and not-for-profit organizations by one year.
The details:
- The effective date of Accounting Standards Update (ASU) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, would change from 2020 to 2023 for smaller reporting companies, from 2021 to 2023 for other public business entities, and from 2022 to 2023 for private companies and nonprofits.
- Larger calendar-year-end SEC registrants would keep the current January 1, 2020, effective date to adopt ASU 2016-13.
- The effective date of ASU No. 2016-02, Leases (Topic 842), and ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, would be deferred from 2020 to 2021 for private companies and nonprofits.
If you have any questions about this update or other CECL concerns, please contact the financial institutions team.
More information from FASB is available in the updated CECL Q&A document.