US Agencies Issue Supplemental Instructions to FFIEC Call Reports
US Agencies (FDIC, FED, and OCC) issued supplemental instructions to the Call Reports FFIEC 031, FFIEC 041, and FFIEC 051. The supplemental instructions have been issued in response to the comments received on the proposed interagency Policy Statement on allowances for credit losses. The supplemental instructions pertain to nonaccrual treatment of purchased credit-deteriorated (PCD) assets for the March 31, 2020 Call Report for banks that have PCD assets and have adopted the FASB Accounting Standards Update No. 2016-13 on the measurement of credit losses on financial instruments (Topic 326).
For purposes of the March 31, 2020 Call Report, if an institution has adopted ASU 2016‐13 and has a PCD asset, including a PCD asset that was previously a purchased credit‐impaired (PCI) asset or part of a pool of PCI assets, that would otherwise be required to be placed in non-accrual status, the institution may elect to continue accruing interest income and not report the PCD asset as being in non-accrual status if the following criteria are met:
- the institution reasonably estimates the timing and amounts of cash flows expected to be collected
- the institution did not acquire the asset primarily for the rewards of ownership of the underlying collateral, such as use of collateral in operations of the institution or improving the collateral for resale
The agencies plan to propose changes to the call report instructions to revise the nonaccrual treatment for PCD assets through the Paperwork Reduction Act process, which will include a request for comment. Call Reports are the source of the most current statistical data available for identifying areas of focus for on-site and off-site examinations. FFIEC 031 is the Call Report for a bank with domestic and foreign offices, FFIEC 041 is the Call Report for a bank with domestic offices only, and FFIEC 051 is the call report for a bank with domestic offices only and total assets less than USD 1 billion.
Related Links
Keywords: Americas, US, Banking, Accounting, Credit Losses Standard, FFIEC 051, FFIEC 031, PCD Assets, Accounting Standards Update, CECL, US Agencies
Featured Experts
Jun Chen
A well-recognized researcher in the field; offers many years of experience in the real estate finance industry, and leads research efforts in expanding credit risk analytics to commercial real estate.
Cristian deRitis
Leading economist; recognized authority and commentator on personal finance and credit, U.S. housing, economic trends and policy implications; innovator in econometric and credit modeling techniques.
Metin Epözdemir
Metin Epözdemir helps European and African banks with design and implementation of credit risk, stress testing, capital management, and credit loss accounting solutions.
Related Articles
EBA Analyzes Impact of Unwind Mechanism of Liquidity Coverage Ratio
EBA published a report analyzing the impact of the unwind mechanism of the liquidity coverage ratio (LCR) for a sample of European banks over a three-year period, from the end of 2016 to the first quarter of 2020.
ECB Outlines Views on Possible Changes to AnaCredit Rule and TLTROs
In response to questions from a member of the European Parliament, the ECB President Christine Lagarde issued a letter clarifying the possibility of amending the AnaCredit Regulation and making targeted longer-term refinancing operations (TLTROs) dependent on the climate-related impact of bank loans.
IASB Begins First Phase of Post-Implementation Review of IFRS 9
IASB started the post-implementation review of the classification and measurement requirements in IFRS 9 on financial instruments and added the review as a project to its work plan.
FSB Report Examines Progress in Resolvability of Systemic Institutions
FSB published a report that examines progress in implementing policy measures to enhance the resolvability of systemically important financial institutions.
EBA Benchmarks National Insolvency Frameworks Across EU
EBA published a report on the benchmarking of national loan enforcement frameworks across 27 EU member states, in response to the call for advice from EC.
FSB Reports Assess Impact of Pandemic on Financial Stability
FSB published a letter from its Chair Randal K. Quarles, along with two reports exploring various aspects of the market turmoil resulting from the COVID-19 event.
RBNZ Consults on Implementation of Capital Review Changes
RBNZ launched a consultation on the details for implementing the final Capital Review decisions announced in December 2019.
IASB Announces Andreas Barckow as the New Chair from July 2021
The Trustees of the IFRS Foundation, which are responsible for the governance and oversight of IASB, have announced the appointment of Dr. Andreas Barckow as the IASB Chair, effective July 2021.
HKMA Consults on Capital Rules for Bank Equity Investments in Funds
HKMA issued a letter to consult the banking industry on a full set of proposed draft amendments to the Banking (Capital) Rules for implementing the Basel standard on capital requirements for banks’ equity investments in funds in Hong Kong.
ESRB Supports Extension of Macro-Prudential Measure by Swedish FSA
ESRB published an opinion assessing the decision of Swedish Financial Supervisory Authority (FSA) to extend the application period of a stricter measure for residential mortgage lending, in accordance with Article 458 of the Capital Requirements Regulation (CRR).
