Featured Product

    US Agencies Publish FAQs on Accounting Standard on Credit Losses

    US Agencies (FED, FDIC, NCUA, and OCC) issued frequently asked questions (FAQs) on the new accounting standard for credit losses, in an effort to assist institutions and examiners. The FAQs focus on the application of the current expected credit losses methodology (CECL) for estimating credit loss allowances and related supervisory expectations and regulatory reporting guidance. The periodic issuance and updating of the FAQs is part of the efforts by the US Agencies to support institutions as they prepare to implement CECL.

    The FAQ document also includes the questions and answers issued in September 2017 and December 2016. US Agencies published nine additional questions, updated responses to four existing questions, and added an appendix with links to relevant resources that are available to banks for help with the implementation of CECL. The nine additional FAQs cover the following topics:

    • Consideration of stress testing models, scenarios, and forecast periods when forecasting future economic conditions for CECL
    • Accounting implementation issues related to expected future changes in collateral when using the collateral-dependent practical expedient and related to the borrower payment behaviors as a risk characteristic for credit card portfolios
    • Internal control considerations for CECL implementation
    • Clarification of US Agencies’ use of the term “smaller and less complex” related to the scalability of CECL
    • Concepts in existing interagency policy statements related to the allowance for loan and lease losses that remain relevant

    The four updated responses pertain to the existing questions 4, 18, 34, and 35. The updated responses reflect the new effective date for nonpublic business entities as announced in the FASB Accounting Standard Update 2018-19, titled “Codification Improvements to Topic 326, Financial InstrumentsCredit Losses” and issued in November 2018; the updated responses also reflect the final rule that modifies regulatory capital rules. The new standard takes effect in 2020, 2021, or 2022, depending on the characteristics of an institution. 

     

    Related Links

    Keywords: Americas, US, Banking, Accounting, CECL, IFRS 9, FAQ, Credit Risk, Financial Instruments, US Agencies

     

    Featured Experts
    Related Articles
    News

    EC Rule on Contractual Recognition of Write Down and Conversion Powers

    The European Commission (EC) published the Delegated Regulation 2021/1527 with regard to the regulatory technical standards for the contractual recognition of write down and conversion powers.

    September 17, 2021 WebPage Regulatory News
    News

    APRA Issues Further Guidance on Application of Securitization Standard

    The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to provide guidance to authorized deposit-taking institutions on the interpretation of APS 120, the prudential standard on securitization.

    September 16, 2021 WebPage Regulatory News
    News

    SRB Provides Update on Approach to Prior Permissions Regime

    The Single Resolution Board (SRB) published a Communication on the application of regulatory technical standard provisions on prior permission for reducing eligible liabilities instruments as of January 01, 2022.

    September 16, 2021 WebPage Regulatory News
    News

    APRA Publishes FAQs on Capital Treatment of Overseas Subsidiaries

    The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to clarify the regulatory capital treatment of investments in the overseas deposit-taking and insurance subsidiaries.

    September 15, 2021 WebPage Regulatory News
    News

    EBA Finalizes Guidance to Assess Breaches of Large Exposure Limits

    The European Banking Authority (EBA) published the final report on the guidelines specifying the criteria to assess the exceptional cases when institutions exceed the large exposure limits and the time and measures needed for institutions to return to compliance.

    September 15, 2021 WebPage Regulatory News
    News

    PRA Finalizes Changes to Consolidated Prudential Rules Under CRD5/CRR2

    The Prudential Regulation Authority (PRA) issued the policy statement PS20/21, which contains final rules for the application of existing consolidated prudential requirements to financial holding companies and mixed financial holding companies.

    September 15, 2021 WebPage Regulatory News
    News

    EBA Revises Guidelines on Stress Tests of Deposit Guarantee Schemes

    The European Banking Authority (EBA) revised the guidelines on stress tests to be conducted by the national deposit guarantee schemes under the Deposit Guarantee Schemes Directive (DGSD).

    September 15, 2021 WebPage Regulatory News
    News

    Nordea Bank and EIB Sign Agreement to Fund Green Projects in Nordics

    The European Commission (EC) announced that Nordea Bank has signed a guarantee agreement with the European Investment Bank (EIB) Group to support the sustainable transformation of businesses in the Nordics.

    September 15, 2021 WebPage Regulatory News
    News

    HKMA Endorses Industry Guidance to Support LIBOR Transition

    The Hong Kong Monetary Authority (HKMA) issued a circular, for all authorized institutions, to confirm its support of an information note that sets out various options available in the loan market for replacing USD LIBOR with the Secured Overnight Financing Rate (SOFR).

    September 14, 2021 WebPage Regulatory News
    News

    OCC Issues Booklet on Supervision of Problem Banks

    The Office of the Comptroller of the Currency (OCC) issued a new "Problem Bank Supervision" booklet of the Comptroller's Handbook. The booklet covers information on timely identification and rehabilitation of problem banks and their advanced supervision, enforcement, and resolution when conditions warrant.

    September 13, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7481