US House Holds Hearing to Assess Impact of CECL Accounting Standard
Members of the Financial Services Subcommittee of the U.S. House of Representatives held a hearing to discuss the impact of the current expected credit loss (CECL) accounting standard on financial institutions and the U.S. economy. Also discussed were the effect of this accounting standard on the availability and affordability of credit as well as its potential burden on financial institutions.
In June 2016, FASB, which establishes financial accounting and reporting standards for public and private companies and not-for-profit organizations that follow Generally Accepted Accounting Principles (GAAP), proposed a new credit loss standard—the Current Expected Credit Loss (CECL). Under the CECL standard, institutions will recognize the expected lifetime losses at the time a loan or financial instrument is recorded. The change to credit loss estimates under CECL will be required of all financial statements issued by those entities that file with the SEC, for reporting periods beginning after December 15, 2019. Some consider the CECL standard to be the most significant accounting change in the banking industry over the last 40 years.
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Keywords: Americas, US, Banking, IFRS 9, CECL, FASB, US GAAP, Financial Services Committee, US House of Representatives
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