Financial Accounting Standards Board (FASB) Standards
In June 2016, the Financial Accounting Standards Board (FASB) issued a new accounting standard governing the way companies will evaluate and account for impaired loans and securities. The new standard, ASU 2016-13, replaces the current incurred loss model for calculating the allowance for loan and credit losses with an expected loss model. As the name suggests, CECL will require companies to take long, forward-looking approach when establishing reserves for loan and credit losses. The CECL standard is effective for SEC registrants in 2020 and all other companies in 2021. Early adoption of the standard is permitted beginning in 2019.
CECL probably represents one of the most significant rewrites of U.S. GAAP in the past 40 years. Once implemented, it will fundamentally change how banks and other financial companies recognize credit losses in their loan and held-to-maturity debt security portfolios.
Recent MBA Activity Related to Tax and Accounting Issues
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MBA Preliminary Summary of Final Regulations under Section 199A
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Joint Trade House Committee Leader on Gain of Sale
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MBA Letter to the IRS on Proposed Regulations on Investing in Qualified Opportunity Zones
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Joint Trades Letter to Senate Committee Leader on Gain of Sale
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Joint Letter Supporting the Invest in America Act (H.R. 6726)
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MBA Letter to FSOC on Request for Delay of CECL Implementation Pending a Necessary Financial Stability Oversight Council (FSOC) Quantitative Study and Analysis of its Impact
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MBA Letter to Treasury and IRS on Proposed Regulations Concerning the Qualified Business Income Deduction under Section 199A of the Internal Revenue Code
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MBA Letter and Memo to Treasury and IRS on Section 199A
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MBA Letter to Senate Banking Committee on the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155)
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MBA Letter to House Leadership on Tax Cuts and Jobs Act
