News from the American Institute of CPAs (AICPA)
The AICPA's Financial Reporting Executive Committee (FinREC) has issued a working draft of accounting issues related to the implementation of Accounting Standards Update (ASU) No. 2016-13, Financial Instruments-Credit Losses and is requesting feedback on issue paper Reasonable and Supportable Forecasting.
Current Expected Credit Loss, or CECL, is a new standard that will change how financial institutions account for expected credit losses and, is the most significant change to financial institutions in forty years. It affects reserves for losses over loans booked and allows for more forward-looking information to be considered when developing a best estimate.
The working draft discusses helpful considerations for Depository and Lending Institutions, and Insurance Companies and is available at:
"This project demonstrates the AICPA's continuing effort to ease implementation of the standard for auditors and their clients," said Jason Brodmerkel, CPA, Accounting Standards – Depository and Lending Institutions for the AICPA. "It is a tremendous effort for our committee and the many volunteers on our task force all of whom are committed to help the financial reporting system adopt the standard."
Interested parties are encouraged to submit their informal feedback on the implementation issue by December 31, 2018.
Final issues will be included in a new AICPA CECL A&A guide.
For more information, or to speak with a staff expert, contact Jackie Hyland at jackie.hyland@aicpa-cima.com or 919-490-4387.