FASB Issues CECL Update It Says Aimed At Simplifying Measurement Practices

FASB

WASHINGTON—The Financial Accounting Standards Board (FASB) has issued an update aimed at easing the transition to its current expected credit loss standard (CECL) by simplifying measurement practices.

Credit unions would no longer have to use dual measurement methods for certain financial instruments that are similar.

Under the update, credit unions would be able to irrevocably elect the fair value option, on an instrument-by-instrument basis for eligible assets previously measured at an amortized cost basis under CECL. For financial institutions that have not yet implemented CECL, the update will take effect following the date of adoption. The fair value option election does not apply to held-to-maturity debt securities.

"This increases the comparability of financial statement information provided by institutions that otherwise would have reported similar financial instruments using different measurement methodologies, potentially decreasing costs for financial statement preparers while providing more useful information to investors and other users," said FASB in a statement.

In response, NAFCU again stated credit unions should not be included within the scope of CECL, and said it will continue to advocate for credit union exemption.

 

Section: Standard
Word Count: 247
Copyright Holder: CUToday.info
Copyright Year: 2019
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URL: http://www.cutoday.info/Fresh-Today/FASB-Issues-CECL-Update-It-Says-Aimed-At-Simplifying-Measurement-Practices