FED adopted the proposal to extend for three years, with revision, the FR Y-9, FR Y-7N, FR Y-11, and FR 2314 family of reports, in addition to the forms FR 2886b, FR Y-8, FR 2248, FR 2320, FR 2644, and FR 2886b. The revisions are applicable as of March 31, 2019. Among others, the notice describes in detail revisions for the FR Y-9C report, mostly on a schedule-by-schedule basis. The CECL revisions to all the other reports mirror the revisions to the FR Y-9C, where applicable.

FED, on December 12, 2018, had published the proposal, for which the comment period expired on February 11, 2019. Since FED did not receive any comments, the revisions will be implemented as proposed. FED adopted the following revisions:

  • To implement changes to address the revised accounting standards for the adoption of the current expected credit loss (CECL) methodology across all of the reports
  • To extend for three years through the normal delegated review process certain revisions to the FR Y-9C that FED previously approved on a temporary basis to implement changes consistent with Section 214 and Section 202 of the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act pertaining to the risk-weighting of high volatility commercial real estate (HVCRE) exposures and the treatment of reciprocal deposits
  • To clarify reporting of unrealized holding gains and losses on equity securities on the FR Y-9C report
  • To make several revisions to the FR 2886b report, including updating references to applicable capital requirements, revising the eligibility criteria for reporting the trading schedule, and implementing changes pertaining to the accounting treatment of equity securities

The reporting changes related to CECL are tied to the approved regulatory capital rules related to implementation and capital transition for CECL (CECL Rule) by FED, FDIC, and OCC and to the corresponding CECL revisions to the Consolidated Reports of Condition and Income (Call Reports FFIEC 031, FFIEC 041, and FFIEC 051; OMB No. 7100-0036). The effective dates for adopting CECL vary depending on whether a firm is a public business entity, an SEC report filer, or an early adopter. Due to the different effective dates for the Accounting Standards Update (ASU) 2016-13, the period over which institutions may be implementing this ASU ranges from the first quarter of 2019 through the fourth quarter of 2022. December 31, 2022, will be the first quarter-end when all institutions would be required to prepare their reports in accordance with the ASU 2016-13. It is expected that the majority of institutions will implement the standard in the first or fourth quarter of 2021.

Schedule titles or specific data item captions resulting from the change in nomenclature on the adoption of CECL generally would not be reflected in the reporting forms until March 31, 2021, as outlined in the schedule-by-schedule descriptions of the changes to the affected reporting schedules. Because of the staggered adoption dates, FED is implementing the CECL revisions in the following stages:

  • First, FED revised the reporting form and instructions and added data items and schedules for certain impacted reports effective for March 31, 2019. The changes included guidance stating how institutions that have adopted ASU-2016-13 should report the data items related to the “provision for credit losses” and “allowance for credit losses, as applicable.
  • Next, for the transition period from March 31, 2021, through December 31, 2022, the reporting form and instructions for each impacted schedule title or data item will be updated to include guidance stating how institutions that have not adopted ASU 2016-13 should report the “provision for loan and lease losses” or the “allowance for loan and lease losses (ALLL),” as applicable.

 

Related Links 

Effective Date: March 31, 2019

Keywords: Americas, US, Banking, Reporting, CECL, IFRS 9, EGRRCP Act, FR Y-9C, Call Reports, FED

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