10.1 Overview
Since the issuance of ASU 2016-13, the FASB has released
various additional final ASUs to (1) make certain technical corrections and
improvements on the basis of technical inquiries and TRG recommendations, (2) delay
the effective date for certain entities, and (3) provide transition relief through
the use of a fair value option. In addition, the FASB staff has issued two Q&A
documents (see Section
10.2.2) addressing various aspects of the CECL model and a
proposed ASU that would change the scope of the PCD “gross up”
model (see Section 10.2.4).
The SEC and banking regulators — such as the Federal Reserve Board,
OCC, FDIC, National Credit Union Administration, and Federal Housing Finance Agency
— have also been involved in the standard-setting process (e.g., through their
involvement in TRG meetings). Given the impact that the CECL model will have on
certain industries, the level of implementation activity is not surprising.
Stakeholders should continue to monitor activity at the FASB, SEC, and other
standard setters or regulators for any relevant developments or interpretations.
In addition, the AICPA’s Financial Reporting Executive Committee has
reviewed various credit loss implementation issues identified by members of the
AICPA’s Depository Institutions and Insurance Expert Panel and has posted them to
its Web site. Many of those issues have been included in an AICPA
Audit and Accounting Guide on credit losses.
Further, the COVID-19 pandemic has affected major economic and financial markets, and
virtually all industries are facing challenges associated with the economic
conditions resulting from efforts to address it. In response to the pandemic,
governments and other regulatory bodies have taken certain actions to help alleviate
the financial burden caused by COVID-19. See Section 10.3.5 for
a summary of certain actions governments and other regulatory bodies have taken with
respect to the application of ASC 326 and other relevant topics.