Agency updates FAQs for credit unions as they employ CECL accounting standard

A list of frequently asked questions (FAQs) on the current expected credit losses (CECL) accounting standard for credit unions has been updated by their federal regulator, along with the agency’s simplified tool for dealing with the standard.

The National Credit Union Administration (NCUA) said its FAQs on CECL (a generally accepted accounting principle [GAAP]) addresses such topics as the CECL implementation date for credit union supervisory committee audits and agreed-upon procedures. It also addresses: precedents for establishing a fiscal year to be other than a calendar year; day-one adjustment to undivided earnings; and allowance for loan and lease losses for credit unions with assets of less than $10 million.

The simplified CECL tool FAQs, the NCUA said, address topics including monthly use of the CECL tool, negative loss rates, loans to be individually evaluated, qualitative adjustments for current year loss trends, participations and indirect loan programs, and larger credit unions using the CECL tool.

The agency directed users to download the latest version of the CECL tool at its “The Simplified CECL Tool” page on its website. For more information on use of the tool, the agency directed users to review the “Frequently Asked Questions,” “User Guide,” and “Model Development Document” located on the same webpage.

NCUA Releases New Updated FAQs on CECL, Simplified CECL Tool