The Federal Reserve Board, the Office of the Comptroller of the Currency ("OCC"), the FDIC and the National Credit Union Administration updated its FAQ on the new credit losses accounting standard. Separately, the OCC rescinded two Bulletins related to the new credit losses accounting standard.
As previously covered, the new accounting standard introduces the current expected credit losses methodology ("CECL") for "estimating allowances for credit losses."
The amended FAQ adds to the guidance provided in 2017 and 2016, specifically addressing:
- collateral-dependent loans;
- "reasonable and supportable forecasts";
- the application of CECL and associated supervisory expectations for estimating credit loss allowances;
- how the new standard modifies existing U.S. generally accepted accounting principles (GAAP); and
- internal control considerations with respect to data.
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