The Banking Brotherhood (FRB, FDIC, NCUA and OCC) released a list of frequently asked questions regarding the new accounting standards that introduced the Current Expected Credit Losses (CECL) methodology. The intent of releasing the questions is to help institutions and examiners understand and abide by the new requirements.
The new FAQs, which join 23 others originally published in 2016, cover initial supervisory views about qualitative factors, data needs, and the use of the collateral-dependent practical expedient; changes in expected credit losses for purchased financial assets that deteriorate in value under CECL after their acquisition; the definition of a “public business entity” and matters related to PBE status; and the process for incorporating CECL into banks’ regulatory reports, including examples for institutions with non-calendar fiscal years.
Questions 1 – 23 are reprinted from the 2016 FAQs, and questions 24 – 37 are new updates.
