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September/October 2018 Issue: Front Page > Industry Info
VolVoice


Industry Info
What's New with CECL?
What's New?
Hopefully your CECL preparation is moving along well. In the information age the challenge isn’t always access to information, but filtering down to information that is relevant to your credit union. We wanted to prepare a short list of CECL updates and topics that are pertinent to you.


Possible Zero Credit Loss Financial Instruments
The AICPA is continually addressing CECL implementation issues. Their Financial Reporting Center recently issued a draft of a proposed addition to their Allowance for Credit Losses- Auditing and Accounting Guide that addresses the possibility of financial instruments with zero expected credit losses. Examples provided are U.S. Treasuries and agency mortgage-backed securities, along with qualitative indicators that could be used in your analysis of similar instruments. This draft is a worthwhile read and is out for exposure at the time of our publication, with comments due by October 10, 2018.



Possible Credit Union CECL Implementation Date Change
Federal and state chartered credit unions are considered non-public business entities (non-PBEs) by the Financial Accounting Standards Board. Initially FASB required non-PBEs to adopt CECL, at the latest, for fiscal years beginning after December 15, 2020. FASB's board agreed to a proposal at their July 2018 meeting that would extend the non-PBE deadline to fiscal years beginning after December 15, 2021, including interim periods within that fiscal year. Not only does a deadline extension provide credit unions more time to prepare, but the longer delay between the implementation dates for SEC filers and credit unions could allow more time for interpretive and practical guidance to be developed for our benefit.



VolCorp Updates
On August 21, 2018 VolCorp held a successful CECL training event. We were joined by many credit unions from several states, both in-person and remotely. Bill Fitzgerald and Rob Demonbreun from the accounting firm Carr, Riggs & Ingram compared current credit loss concepts against CECL's forward looking requirements, and provided practical excel-based examples of how credit unions could address CECL using several acceptable modeling methods.




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