The Financial Accounting Standards Board is proposing some amendments to the pending new standard on credit losses.

FASB describes the proposed amendments as “codification improvements,” referring to Topic 326 of the Accounting Standards Codification, which is where companies can find the rules describing the “current expected credit losses” (CECL) approach to reflecting debt-based financial instruments in financial statements.

As its name suggests, CECL takes a more current or even forward-looking approach to explaining where companies have risk in their credit arrangements. It does away with historic rules that permitted companies to report losses to investors only when they were virtually assured.

The proposed Accounting Standards Update to ASC 326 amends transition requirements to give entities other than public companies greater clarity on implementing the annual reporting requirements in tandem with interim reporting. Public companies must reflect the new accounting beginning with interim and annual periods beginning after Dec. 15, 2020. Other entities faced questions and confusion about their effective date a year later based on the standard’s requirements about cumulative-effect adjustments that must be made to opening retained earnings.

The proposal also clarifies for all entities, both public and non-public, that the standard is not intended to affect the accounting for receivables arising from operating leases. Those figures should be reflected under the new lease accounting standard, the board says.

The board said companies raised lease questions because ASU 326 tells entities how to account for net investments in leases arising from sale-type and direct financing leases. It is not, however, specific to operating leases. That prompted FASB to clarify that receivables arising from operating leases are addressed in the new standard on lease accounting, which public companies are working to adopt by the Jan. 1, 2019, effective date.

The latest polling data suggests varying degrees of readiness on the part of financial institutions to implement the new accounting. The CECL standard represents a massive change, particularly for entities in financial services, in how to reflect credit losses.

The new guidance tells entities to use their own historic data, current conditions, and reasonable forecasts, both of internal and external market factors, to project credit losses. The standard requires entities to estimate such losses and book some provision for them at the inception of instruments, even when they are fully performing at the outset.

Smaller banks have been especially vocal about the need for guidance and clarity on how the standard should be implemented and how the accounting will be assessed by auditors and regulators, worried they would need complicated, sophisticated modeling to comply. FASB attempted to address those concerns as it moved to adopt the final standard, but survey data suggests companies continue to struggle with preparations.

FASB’s Transition Resource Group, formed to field and respond to implementation questions, last met in June to address questions on capitalized interest, accrued interest, transfer of loans among classifications, recoveries, and refinancing and loan prepayments.