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Federal Deposit
Insurance Corporation

Each depositor insured to at least $250,000 per insured bank

Financial Institution Letters

FIL-79-2016
December 19, 2016

New Accounting Standard on Credit Losses: Frequently Asked Questions

Printable Format:

FIL-79-2016 - PDF (PDF Help)

Summary:

The federal financial institution regulatory agencies are issuing the attached Frequently Asked Questions on the New Accounting Standard on Financial Instruments – Credit Losses to assist institutions and examiners. This new standard, published by the Financial Accounting Standards Board (FASB) in June 2016, introduces the current expected credit losses methodology (CECL) for estimating allowances for credit losses. The Frequently Asked Questions (FAQs) focus on the application of CECL and related supervisory expectations. The issuance of the FAQs is part of the agencies' efforts to support institutions as they prepare to implement CECL. The agencies plan to update the FAQs periodically.

Statement of Applicability to Institutions under $1 Billion in Total Assets: This Financial Institution Letter applies to all FDIC-supervised banks and savings associations, including community institutions.

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Note:

FDIC Financial Institution Letters (FILs) may be accessed from the FDIC's website at https://www.fdic.gov/news/news/financial/2016/.

To receive FILs electronically, please visit https://www.fdic.gov/about/subscriptions/fil.html.

Paper copies may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E 1002, Arlington, VA 22226 (877-275-3342 or 703-562-2200).

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