FASB to Conduct Post-Implementation Review of CECL Standard
FASB announced the launch of its new Post-Implementation Review (PIR) web portal. The web portal contains information on the post-implementation review projects, providing an overview of the actions taken to date as well as the plan for future activities. The current post-implementation review projects are on credit losses, leases, and revenue recognition. In the three-stage post-implementation review process activity plan for the credit losses project, Stage 1 involves activities related to the post-issuance-date implementation monitoring and Stage 2 involves post-effective-date evaluation of costs and benefits. Among other activities, the staff will host a roundtable in the first half of 2021 to discuss the implementation of Topic 326. In the final and third stage of the plan, the Boards will discuss the results of their research and prepare a final report for the Standard-Setting Process Oversight Committee.
The post-implementation review process is an important quality control mechanism built into standard-setting process of FASB that begins after a standard is issued. During the process, FASB solicits and considers diverse stakeholder input and other research to evaluate whether a standard is achieving its objective to provide financial statement users with relevant information in ways that justify the cost of providing it. This will allow FASB to identify and address any areas for improvement arising from either adoption or implementation. Depending on the outcome of the evaluation, FASB may decide to take action to address one or more of the following:
- Areas of the standard that are not understandable
- Unintended consequences that were not foreseen during development of the standard
- Unexpected costs (one time or ongoing) based on the actual results observed, in comparison with the expectations documented in the Board's basis for conclusions
As with all standard-setting activities, actions resulting from a post-implementation review are subject to the normal due process of the Board.
Related Links
- Press Release
- Plan for Review of Credit Losses Standard (PDF)
- Post-Implementation Review Portal
- Post-Implementation Review Process
Keywords: Americas, US, Banking, Insurance, Post-Implementation Review, CECL, Financial Instruments, Topic 326, Credit Risk, FASB
Previous Article
MAS Awards SRFB Privileges to Standard Chartered Bank in SingaporeRelated Articles
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
BIS Bulletin Examines Cognitive Limits of Large Language Models
The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.
ECB is Conducting First Cyber Risk Stress Test for Banks
As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.
EBA Continues Momentum Toward Strengthening Prudential Rules for Banks
A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.
EU and UK Agencies Issue Updates on Final Basel III Rules
The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards