Questions about the new credit losses accounting standard, which introduces the current expected credit losses (CECL) methodology that have been brought up by bankers will be addressed in a July 30 webinar sponsored by the federal banking agencies, among others.
The webinar, set for 1 p.m. on July 30 (scheduled to run for 90 minutes), is hosted by the Federal Deposit Insurance Corp. (FDIC), the Office of the Comptroller of the Currency (OCC) and the Federal Reserve. Among others hosting the event is the Financial Accounting Standards Board (FASB), which adopted and implemented the accounting standard.
Technically, the CECL standard is referred to by FASB as “Accounting Standards Update (ASU) No. 2016-13, Financial Instruments—Credit Losses (Topic 326).”It was issued in June 2016.
The federal banking agencies have proposed new capital rules for financial institutions to help them prepare for the new accounting standards, which begins taking effect next year.
Under the proposal, the agencies would revise their regulatory capital rules to identify which credit loss allowances under the new accounting standard are eligible for inclusion in regulatory capital and to provide banking organizations the option to phase in the day-one adverse effects on regulatory capital that may result from the adoption of the new accounting standard.
The July 30 webinar, the agencies said, is focused on questions received from community bankers about the accounting standard. In a Financial Institution Letter (FIL 34-2018), the FDIC said the participants will also be able to submit additional questions to be considered during the webinar. Institution-specific questions should be directed to an institution’s primary federal regulator; FDIC-supervised institutions may submit such questions by email to CECL@fdic.gov, the agency said.
“Bankers are encouraged to invite representatives from the functional areas within their institutions who are involved in the implementation of the new credit losses accounting standard to participate in the webinar,” the agency sated in the FIL.
Community Bank Webinar: Current Expected Credit Losses Methodology Q&A Webinar for Community Bankers
Calendar: Banking agencies’ webinar on CECL questions (with login instructions)