1.1 Background

The aim of the CECL model in ASC 326 is to avoid delayed recognition of credit losses, which was viewed as a weakness under previous U.S. GAAP credit loss models. ASC 326 resulted from years of deliberating various credit loss recognition models (sometimes jointly with the International Accounting Standards Board [IASB®]). The FASB issued its final standard on the measurement of expected credit losses, ASU 2016-13 (codified as ASC 326), in 2016. The timeline below depicts the stages in the Board’s development of that guidance, beginning with the Financial Crisis Advisory Group’s (FCAG’s) recommendation, in 2008, that the FASB and IASB develop a credit loss model that incorporates forward-looking information and eliminates barriers to the timely recognition of losses under incurred loss models.

1.1.1 CECL Model Timeline

2008	FCAG recommends that FASB and IASB jointly explore alternatives to the incurred loss model that would use more forward-looking information and would eliminate the delayed recognition of credit losses.
2009	IASB issues exposure draft (ED) on amortized cost and impairment related to financial instruments (November).
2010	FASB issues proposed ASU on accounting for financial instruments and revisions to the accounting for derivative instruments and hedging activities (May).
2011	FASB and IASB jointly issue a supplementary document on accounting for financial instruments and revisions to the accounting for derivative instruments and hedging activities — impairment (January).
2012	FASB decides to no longer pursue a converged standard and issues a proposed ASU on credit losses (ASC 825-15) (December).
2013	IASB issues ED on expected credit losses (March).
2014	IASB issues final guidance by adding to IFRS 9 impairment requirements related to the accounting for an entity’s expected credit losses (July).
2016	FASB issues final credit losses standard, ASU 2016-13, codified as ASC 326 (June).
2018	FASB issues ASU 2018-19, which contains Codification improvements to ASC 326 (November).
2019	FASB issues ASU 2019-04, which contains Codification improvements to ASC 326, ASC 815, and ASC 825 (April). FASB issues ASU 2019-05, which provides targeted transition relief to entities that are adopting ASC 326 (May). FASB issues ASU 2019-10 to change effective dates for new accounting standards (November). FASB issues ASU 2019-11 on additional Codification improvements to ASC 326 (November).
2020	FASB issues ASU 2020-02 to make certain amendments to SEC paragraphs in accordance with SAB 119 (February). FASB issues ASU 2020-03 on additional Codification improvements to financial instruments (March).
2022	FASB issues ASU 2022-01 to clarify hedge accounting guidance (March). FASB issues ASU 2022-02 on (1) TDRs by creditors and (2) vintage disclosures (March).
2023	FASB issues proposed ASU on purchased financial assets (PFAs) (June).
2024	FASB issues proposed ASU on measurement of credit losses for accounts receivable and contract assets for private companies and certain not-for-profit entities (December).
2025	FASB issues ASU 2025-05 to provide a practical expedient (for all entities) and an accounting policy election (for all entities, other than public business entities, that elect the practical expedient) related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606 (July). FASB issues ASU 2025-08, which amends the guidance in ASC 326 on the accounting for certain purchased loans (November). FASB issues ASU 2025-12, which contains minor Codification improvements to ASC 326, among other amendments (December).

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This publication provides comprehensive guidance; however, it does not address all possible fact patterns, and the guidance is subject to change. Consult a Deloitte & Touche LLP professional regarding your specific issues and questions.