We have been closely following as the complex legislative journey of CECL unfolds.
When the CECL method was initially introduced, the Financial Accounting Standards Board (FASB) outlined a timeline for implementation, but after comments from the industry, the FASB realized additional time was needed to analyze the standard and review calculation options, thus adjusting the implementation date.
On July 17, 2019, the FASB again voted to propose a delay for the implementation of CECL until January 2023, for nonpublic financial institutions. Based on this proposal, CECL implementation for credit unions will apply to fiscal years beginning after December 15, 2022, and for interim periods within fiscal years beginning after December 15, 2023. For a calendar year credit union, the proposed effective date will be January 1, 2023.
On Friday, November 15th, the FASB issued its finalized Accounting Standards Update (ASU) which included an amended timeline of effective dates and formally confirmed the proposed effective dates outlined in the July vote.
While the new effective date is certainly a positive development for credit unions, it doesn’t extend the need for your credit union to be moving forward with your CECL implementation plan. Take a look here for details on preparation for CECL compliance.
The professionals at Albin, Randall & Bennett are credit union industry leaders here to help you through the CECL adoption process. We are available to assist with understanding the new standards, staying alert to accounting changes, and creating a plan for implementation and compliance. If you haven’t started evaluating the standards, contact us to discuss a strategy for getting started.