Coronavirus Relief Package Includes CECL Delay 

Today’s Coronavirus relief bill includes a provision that gives certain institutions the option to delay CECL compliance until the end of the declared national emergency (or December 31, 2020, whichever comes first).  

In summary: 

  • While CECL applies to all US GAAP entities, the delay applies only to a subset of US entities: insured depository institutions, bank holding companies, or affiliates (see the linked article for exact language) 
  • The delay is optional. With 3/31 10-Q filing dates just days away, RiskSpan will monitor how many banks and credit unions go ahead and file CECL as planned, despite the last-minute option to defer, as opposed to reverting back to preexisting accounting rules. 
  • The duration of the delay is highly uncertain. While the postponement could last until the end of the year, the bill places the ultimate decision-making authority on when it will end with the president. Whether the president’s expressed desire that the country be “opened up” in time for Easter (in mid-April) portends a quick end to the emergency declaration is unknown. The timing of the decision seems likely to be guided by some combination of political as well as epidemiological considerations, which makes predicting it difficult.  
  • The adoption deadline for private entities had already been delayed until 2023. The new law does not further extend that delay. 
  • Subscribers to RiskSpan’s Allowance Suite – which include private and non-depository entities unaffected by this delay optionand public banks who might opt to defer under it  continue to move ahead with their loan and security allowance runs, whether for official filings or parallel tests. 

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