An updated version of a tool aimed at helping credit unions comply with current-expected-credit-loss (CECL) accounting requirements was released Monday by the National Credit Union Administration (NCUA), intended to be in time for completing call reports for the quarter ending this Sept. 30.
CECL became effective for most credit unions this Jan. 1. The NCUA’s Simplified CECL Tool, developed primarily for credit unions with less than $100 million in assets, is provided as an option for estimating the allowance for credit losses on loans and leases. The tool is updated quarterly.
The NCUA, in Monday’s “NCUA Express” announcement, said that for credit unions that adopted CECL in the third quarter of 2023, the September 2023 call report will include the day-one adjustment to undivided earnings and the credit loss expense since the date of CECL adoption. It said it also reformatted Tab 2 – Individual Basis – of the Simplified CECL Tool to facilitate entering data on individually evaluated loans.