• White Papers
• 25.11.2015 06:58 am
• Why an early preparation is vital

On Nov 11th, FASB decided the effective dates of adoption for the CECL guidelines. For staggering the dates of adoption for financial institutions (FI) of various sizes, FASB took a different approach from asset size range and used the definition of Public Business Entities (PBE).
• Dec. 15, 2018, including interim periods – For PBEs which are SEC Filers
• Dec. 15, 2019, including interim periods – For PBEs which are non-SEC Filers
• Dec. 15, 2020, including interim periods – For all other entities
The final guidelines on CECL are expected in Q1 2016, hence for the first adoption date, FIs would have eleven quarters to take the required action for a successful transition. Since, even the regulators identify the transition for current “incurred” loss models to “expected” loss model as not just a tweak but a foundational change to how ALLL is calculated, it is important that the FIs start estimating the impact and act in well-coordinated fashion.