group trainingReinforcing its commitment to the upcoming current expected credit loss standard, or CECL, the Financial Accounting Standards Board is hosting workshops around the U.S. in the coming months.

The FASB said its CECL Implementation Workshops will focus on:

  • Techniques for credit loss reserve estimation, including the weighted average remaining maturity, or WARM, method
  • Answers to frequently asked questions
  • Other common implementation issues banks and credit unions may face

“The FASB is committed to ensuring community banks, credit unions, and lending institutions of all sizes can successfully implement the credit losses standard,” FASB Chairman Russell G. Golden said in a statement. “To support their success, FASB staff experts are taking our CECL Implementation Workshops to conferences and other gatherings of these institutions throughout the United States. It’s yet another way we’re promoting a smooth transition to the standard for all.”

FASB CECL workshop locations

Upcoming workshops are:

  • Oct. 28 in Monterey, California, at the California and Nevada Credit Union Leagues’ REACH 2019 Conference
  • Nov. 19 in Philadelphia, Pennsylvania, at the Federal Reserve Bank of Philadelphia’s CFO/CPA Roundtable.
  • Dec. 19 on a webinar hosted by the Credit Union National Association (CUNA)

The FASB also said it is working with the Conference of State Bank Supervisors to hold workshops in various states based on each state’s training needs, but those haven’t yet been announced. New workshops will be announced on the FASB website as more information becomes available.

CECL Update

On Oct. 16, the board affirmed its July decision to extend the effective date for CECL for most financial institutions. Public lenders that file with the Securities and Exchange Commission on a calendar-year basis must still implement the new accounting standard beginning Jan. 1, 2020. However, public lenders that don’t file with the SEC, smaller SEC-reporting companies (as defined by the SEC), privately held banks, and credit unions, will have until 2023 under the board’s plan. A final vote is expected in mid-November.

In a statement following the FASB’s affirmation, the American Bankers Association criticized the accounting standard-setter for moving ahead. It called on federal lawmakers to pursue “Stop and Study” bills that would halt the standard, saying it “carries too much unnecessary risk.”

However, FASB member Harold Schroeder at Abrigo’s 2019 ThinkBIG Conference last month urged bankers to move forward with implementation, regardless of the longer implementation timeline and regardless of efforts to stop CECL on Capitol Hill.

CECL implementation ‘Going to take some time’

“In order to do it right, it’s going to take some time,” Schroeder said. “Don’t look at this extra year as an extra year off,” he said, referring to the additional year by which FASB is extending the implementation deadline for private banks and credit unions. “Treat it as an opportunity to improve your data quality, estimation processes, and internal controls. And if you’ve yet to break the [accounting standard’s] book’s binding, do it today.”

A recent webinar on the WARM method, featuring Abrigo Advisory Services members and CPAs Jared Mills and Baker Eddraa, discussed the pros and cons of the WARM method. It can be accessed here. Additional CECL resources for bankers, including whitepapers and infographics summarizing the CECL methodologies, are also available.

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