Allowance for credit losses & CECL

Make the adaptations for CECL in time

The replacement of the incurred loss model with the current expected credit loss (CECL) model means the clock is now ticking for you to calculate allowance for credit losses differently. It also brings change for your data collection processes. Our deep understanding of this standard – and the requirements and deadlines that go with it – allows Crowe to help you plan for and implement its adoption in your accounting and financial reporting and data collection.

Making the CECL transition

Timing considerations

For the CECL standard, the Financial Accounting Standards Board (FASB) had created a subgroup of public business entities (PBEs) that do not meet the definition of a Securities and Exchange Commission (SEC) filer.

The effective date for those entities was extended by one year as follows:

PBEs that meet the definition of an SEC filer: fiscal years beginning after Dec. 15, 2019 (instead of 2018), including interim periods within those fiscal years
Other PBEs: fiscal years beginning after Dec. 15, 2020 (instead of 2019), and interim periods within those fiscal years
All other entities: fiscal years beginning after Dec. 15, 2020 (instead of 2019), and interim periods within the fiscal years beginning after Dec. 15, 2021 (instead of 2020)

The FASB reaffirmed its decision to permit early adoption for all entities for fiscal years beginning after Dec. 15, 2018, including interim periods within those fiscal years.