Here are the details. January 1, 2023: Publicly-traded entities that qualify as “smaller reporting companies” (as defined by the SEC), publicly-traded entities that do not file reports with the SEC, and all privately-held entities. "We never liked CECL," Los Angeles-based Cathay General Bancorp CFO Heng Chen said in an interview. FASB to Delay CECL Implementation for Some Institutions. On October 16, 2019, the Financial Accounting Standards Board (“FASB”) extended the implementation deadline for the current expected credit loss standard (“CECL”) for qualifying entities.  The new implementation deadlines are as follows: January 1, 2020: Publicly-traded entities that file reports with the Securities and Exchange Commission (“SEC”). The transition deadline delay will benefit certain financial institutions, as we have seen many 2020 CECL implementation banks falling short on lengthy parallel runs due to delays in data preparation, model development, and model implementation. CECL Effective Date Delayed On November 15, 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2019-10, which delayed the effective date for the CECL standard, ASU 2016-13. Late last year, FASB finalized a delay to CECL for smaller reporting companies and all private firms until January 2023 to provide the benefit of more time to implement the major accounting change. In general, the updated standard will require entities to recognize losses on bad loans earlier than under current U.S. Generally Accepted Accounting Principles (GAAP). In a significant move, the Financial Accounting Standards Board today voted to propose a delay for the implementation of the current expected credit loss standard until January 2023 for certain companies. “This bipartisan legislation, cosponsored by eight other House lawmakers, would require FASB to delay the implementation of CECL … As depicted in figure 1, organizations can begin by evaluating their existing risk and Norwalk, CT, August 15, 2019—The Financial Accounting Standards Board today issued a proposed Accounting Standards Update that would grant private companies, not-for-profit organizations, and certain small public companies additional time to implement FASB standards on current expected credit losses (CECL), leases, and hedging. The ASU extends the effective dates of CECL for smaller public business entities and nonpublic business entities. The regulators said in a Friday press release that the changes are designed to “support lending to households and businesses.” One such measure allows certain banks and credit unions to temporarily postpone implementation of the controversial current expected credit loss (CECL) standard. Originally, it was scheduled to go into effect for most public companies in 2020. Banks are not required to implement the new two-year delay. CECL is currently scheduled to become effective for credit unions in January 2023. Call reports and 5300s aren’t even due until late January. CECL delay gives small banks more time to get ready. Many public banks have already made significant investments in systems and processes to comply with the CECL standard, and they’ve communicated with investors about the changes. In March 2020, the CARES Act gave large banks the option to delay CECL reporting by a year. FASB already delayed implementation of the rule for nonpublic and small public companies until 2023. Rep. Blaine Luetkemeyer, R-Mo., tweeted during the meeting that the proposal to delay some CECL effective dates was "not good enough." Smaller banks may be given as much as three extra years to get prepared for CECL implementation. Remember, this is a presentation delay; the effective date has not changed. In “CECL 2019: Finish strong, with confidence,” Deloitte introduces 10 actionable review steps that executives from companies in every industry should consider before beginning the final leg of their CECL … EXCERPT The FASB's CECL standards may be delayed in implementation for certain banks, but that doesn't mean they should delay in making any necessary changes to be prepared for the new accounting standards. In March 2020, the CARES Act gave large banks the option to delay CECL reporting by a year. The CECL critics have pushed for delay after delay. The Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2020 CECL adopters make adjustments. CARES Act Delays Implementation of FASB CECL Standard By: Chris Gaetano Published Date: ... Later, once the pandemic was in full swing, the FDIC joined in the call to delay implementation, although the FASB expressed hesitance at this idea, saying that this was not the proper way to combat the financial impacts of the coronavirus. The passage of the CARES Act allowed for 2020 CECL adopters to delay the presentation of CECL’s impact on their financial statements until the end of the pandemic or Dec. 31 – whichever comes first. The Financial Accounting Standards Board today voted to extend the implementation of the current expected credit loss standard for certain financial institutions, as proposed earlier this year. “This is a welcome reprieve for those banks impacted by CECL,” he said. So, some may choose not to take advantage of this option to delay implementation — but many banks will hold off. Plus, there’s some concern that the CECL model would cause banks to needlessly hold more capital and curb lending when borrowers need it most. Banks have the option to defer implementation until Dec. 31 or when the state of emergency is lifted, whichever comes first. This is the third time the CECL has been delayed. The implementation of CECL introduces increased subjectivity to the ALLL calculation process and will potentially affect certain lending products’ profitability. CAA Provides Option to Delay Implementing the Updated CECL Standard. CECL Implementation Delayed for Qualifying Entities. So there’s no way you can wait for December 31, 2021 year end data. Under the CARES Act, large public insured depository institutions (including credit unions), bank holding companies, and their affiliates have the option of postponing implementation of the CECL standard until the earlier of: The end of the national emergency declaration related to the COVID-19 crisis, or; December 31, 2020. Small banks are likely to benefit from the proposed delay in the effective date of the Financial Accounting Standards Board’s new credit loss standard, allowing them to learn the lessons from larger banks that have already begun using the new rules.

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