At today’s board meeting FASB voted to:
- Simplify the bucketing of effective dates for CECL implementation to two: (i) SEC filers excluding smaller reporting companies (SRC) as currently defined by the SEC and (ii) all other entities;
- Extend the deadline for (ii) by a year to January 2023.
The new deadline applies to all but the biggest banks as well as credit unions. The previous deadline of January 2021 for smaller publicly traded banks that are not SEC filers has been eliminated.
The rationale for this extension was to give more time to smaller banks to learn from a full reporting, audit and regulatory inspection cycle at the bigger banks, and to also allow the banks to integrate their CECL implementation with their business in order to reap benefits beyond just compliance to the new standard.