The Wait is Over: Planning for Day 1 of CECL

On Wednesday, April 27th, 2016 the Financial Accounting Standards Board (FASB) voted to move forward with the second part of their financial instruments project related to credit impairment, commonly referred to as CECL (Current Expected Credit Loss). They also announced that the final version of the standard will be available by June 2016. The new standard will change current GAAP from an incurred loss model to an expected loss model over the life of the financial instrument being measured. In most cases, this will lead to increased loss reserves for receivables. Also at the meeting, the FASB voted to delay implementation by one year. Now SEC Registrants will adopt in fiscal years beginning after December 15, 2019, others will adopt in fiscal years beginning after December 15, 2020.