On December 19, 2016, the US Federal Reserve, the FDIC, the US National Credit Union Administration and the OCC issued FAQs to assist institutions in implementing the new accounting standard for credit losses, which was recently issued by the US Financial Accounting Standards Board. The new standard, "Financial Instruments—Credit Losses," replaces the existing incurred loss methodology in US GAAP and establishes the new current expected credit losses methodology (CECL). The FAQs expand on the "Joint Statement on the New Accounting Standard on Financial Instruments—Credit Losses," which the agencies issued in June 2016. The agencies plan to continue issuing FAQs regarding the implementation of the CECL methodology.
The notice to the banks is available at: https://www.federalreserve.gov/bankinforeg/srletters/sr1619.htm and the FAQs are available at: https://www.federalreserve.gov/bankinforeg/srletters/sr1619a1.pdf.
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