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.

Timing considerations 

As of Nov. 15, 2019, the Financial Accounting Standards Board (FASB) has updated the effective date of the CECL standard for certain small public companies and other private companies. The effective dates of the standard are now as follows.

ASU 2016-13 (credit impairment) effective dates
SEC filers,1 excluding smaller reporting companies (SRCs) All other entities, including SRCs2
Fiscal years beginning after
Dec. 15, 2019
Fiscal years beginning after Dec. 15, 2022

1 As defined by the FASB Accounting Standards Codification Master Glossary. The FASB’s decisions maintain the current effective date for Accounting Standards Update (ASU) 2016-13 for Securities and Exchange Commission (SEC) filers other than SRCs but would provide SRCs and all other entities with an extra year to adopt ASU 2016-13.

2 Includes all other public business entities (PBEs), including SRCs, private companies, not-for-profit organizations, employee benefit plans, and emerging growth companies that have elected to adopt new accounting standards using private company effective dates. To determine if an entity qualifies as an SRC, the entity would use its status as of its most recent testing date under SEC guidance upon issuance of the codification change.

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.

DIY: transition to CECL

DIY: transition to CECL

Crowe can provide your institution with the tools to “do it yourself.”

Transitioning to CECL 

Learn more about our framework for moving to the CECL standard in this five-part video series.

Contact us

With our deep specialization in the financial services industry, Crowe can support your implementation of the CECL. Contact us today.
Sydney Garmong
Sydney Garmong
Office Managing Partner, Washington, D.C.
Chad Kellar
Chad Kellar