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

    ECB Finds Banks Unprepared for Pillar 3 Climate Risk Disclosures

    The European Central Bank (ECB) published results of the 2022 supervisory assessment of climate-related and environmental risk disclosures among significant institutions (103) and a selected number of less significant institutions (28).

    April 21, 2023 WebPage Regulatory News
    News

    NCUA Assesses Credit Union Exposure to Climate-Related Physical Risks

    The National Credit Union Administration (NCUA) released a Research Note that examines the exposure of credit unions to climate-related physical risks. In a related development

    April 21, 2023 WebPage Regulatory News
    News

    EBA Issues Multiple Regulatory and Reporting Updates for Banks

    The European Banking Authority (EBA) is seeking comments, until July 31, 2023, on the draft Guidelines on the proposed common approach to the resubmission of historical data under the EBA reporting framework.

    April 21, 2023 WebPage Regulatory News
    News

    EC Adopts Regulation on Own Funds, Issues Other Updates

    The European Commission adopted Delegated Regulations on own funds and eligible liabilities, on requirements for the internal methodology under the internal default risk model

    April 20, 2023 WebPage Regulatory News
    News

    CDP Platform to Report Plastic-Related Impact, Issues Other Updates

    The Carbon Disclosure Project (CDP) announced that its global environmental disclosure platform has enabled reporting on plastic-related impact for nearly 7,000 companies worldwide

    April 19, 2023 WebPage Regulatory News
    News

    IASB to Enhance Reporting of Climate Risks, Proposes IFRS 9 Amendments

    The International Accounting Standards Board (IASB) updated its work plan to enhance the reporting of climate-related risks in the financial statements,

    April 19, 2023 WebPage Regulatory News
    News

    BIS Addresses Data Gaps and Macro-Prudential Policy for Climate Risks

    The Financial Stability Institute (FSI) of the Bank for International Settlements (BIS) published a brief paper that examines challenges associated with the use of macro-prudential policies to address climate-related financial risks.

    April 17, 2023 WebPage Regulatory News
    News

    FCA Sets Out Business Plan, Launches TechSprint on Greenwashing

    The Financial Conduct Authority (FCA) published its business plan for 2023-24. The plan sets out details of the work planned for the next 12 months to achieve better outcomes for consumers and markets

    April 17, 2023 WebPage Regulatory News
    News

    UK Committee Sets Out Recommendations for Next Phase of Open Banking

    The Joint Regulatory Oversight Committee (JROC), comprising the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) as co-chairs and the HM Treasury and the Competition and Markets Authority (CMA) as members

    April 17, 2023 WebPage Regulatory News
    News

    ECB Publishes Multiple Regulatory Updates for Banking Institutions

    The European Central Bank (ECB) published the results of the 2022 climate risk stress test of the Eurosystem balance sheet,

    April 17, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8873