2023 Tax Calendar
VIEWpoint Issue 2 | 2022
Inflation Reduction Act: Highlights of Key Changes for You and Yo...
Since its introduction, anticipation amongst financial institutions has been growing about the who, what, when and how of the proposed current expected credit loss model (CECL). While the final accounting standards update (ASU) on accounting for measuring expected credit losses isn’t expected until the first quarter of 2016, FASB’s board members voted on November 11, 2015 to set the effective dates for the planned guidance on the financial instruments project.
The financial instruments project that began years ago includes both an impairment piece, as well as a recognition and measurement aspect. The impairment aspect is the one that has created the angst. Given the anticipated difficulty of implementation of the CECL piece, the implementation dates are different.
The holdup on the final issuance of these accounting updates is rumored to be all about implementation guidance. Therefore, given the uncertainty on the “how” part of the accounting, one could argue that the dates could move again.
In addition to the above items, FASB’s board voted to proceed with the new accounting standard on leases. The primary objectives of this standard would require recognizing lease obligation on the balance sheet. Early adoption will be permitted for all companies and organizations upon issuance of the standard.
The following is a brief summary of the effective dates. Further complicating the announcement is the recently defined “other public business” definition. Now there are three categories that institutions could fall under.
|Proposed Effective Dates
Fiscal years beginning after
|Impairment or CECL||Recognition and Measurement||Leases|
|SEC filers||December 15, 2018||December 15, 2017||December 15, 2018|
|Other public businesses||December 15, 2019||December 15, 2017||December 15, 2018|
|Non-public businesses||December 15, 2019||December 15, 2018||December 15, 2019|
Finally, for those of you contemplating early adoption of CECL, the FASB mentioned in their press release that early adoption will be permitted for fiscal years beginning after December 15, 2018.
Doeren Mayhew will keep you updated as additional guidance related to the CECL model is provided in the months to come. But don’t wait to start preparing. Wondering how you are going to take on the daunting task of implementing the new model? Doeren Mayhew’s team of financial institution advisors in Florida, Michigan, North Carolina and Texas stand ready to help you start preparing for these effective dates now. Contact us today.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
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