Consistent with the adoption of other major accounting standards, regulators will be watching closely for increasingly detailed disclosures to investors about the expected effects of moving to a new method for recognizing credit losses.
Wesley Bricker, chief accountant at the Securities and Exchange Commission, told bankers at a recent conference that disclosures explaining transition to the new “current expected credit losses,” or CECL model for reflecting performance in credit-based financial instruments, will need to be specific enough to help investors understand the change that is coming. “Nobody likes surprises,” he said.
