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FASB rejects bank request to ease CECL effects on income

Tammy Whitehouse | April 4, 2019

The Financial Accounting Standards Board has rejected a proposal by some banks to revise the pending credit losses standard, due to take effect Jan. 1, 2020.

The standard, which requires all public companies to adopt a current expected credit losses approach to recognizing credit-based instruments in financial statements, would become even more complex under the approach some banks proposed, FASB determined. “I don’t believe the potential benefit that could come from this is justified by what I view as substantial incremental cost to do it,” said FASB Chairman Russ Golden during the board’s public meeting to deliberate the proposal.

Under Accounting Standards Codification Topic 326, the CECL model...

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