NCUA Releases New Updated FAQs on CECL, Simplified CECL Tool

The NCUA has released updates to its frequently asked questions on the current expected credit losses (CECL) accounting standard and its Simplified CECL Tool.

The CECL GAAP FAQs address common credit union topics including:

CECL implementation date for supervisory committee audits and agreed-upon procedures engagements;Precedents for establishing a fiscal year to be other than a calendar year;Day-one adjustment to undivided earnings; andAllowance for loan and lease losses for credit unions with assets of less than $10 million.

The Simplified CECL Tool FAQs address such topics as:

Monthly use of the CECL Tool;Negative loss rates;Loans to be individually evaluated;Qualitative adjustments for current year loss trends;Participations and indirect loan programs; andLarger credit unions using the CECL Tool.