- Board of Governors of the Federal Reserve System
- Federal Deposit Insurance Corporation
- National Credit Union Administration
- Office of the Comptroller of the Currency
For Immediate Release: June 17, 2016
The four federal financial institution regulatory agencies today issued a joint statement regarding the new accounting standard, Accounting Standards Update (ASU) No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, issued by the Financial Accounting Standards Board. The joint statement also provides initial supervisory views regarding the standard’s implementation.
The new accounting standard applies to all banks, savings associations, credit unions, and financial institution holding companies, regardless of asset size. The standard allows for various expected credit loss estimation methods and is scalable.
The standard will become effective in 2020 for financial institutions required to file financial statements with the U.S. Securities and Exchange Commission or the appropriate federal banking agency under the federal securities laws. The new accounting standard will take effect in 2021 for all other financial institutions. Early adoption is permitted, but no earlier than in 2019.
The agencies encourage financial institutions to begin planning implementation of the new standard and ensure that appropriate institution staff works closely with their senior executives and boards of directors during this transition. Institutions are encouraged to plan for the potential impact of the new standard on capital in advance of the new standard’s effective date.
Attachment: Joint Statement
NCUA is the independent federal agency created by the U.S. Congress to regulate, charter and supervise federal credit unions. With the backing of the full faith and credit of the United States, NCUA operates and manages the National Credit Union Share
Insurance Fund, insuring the deposits of account holders in all federal credit unions and the overwhelming majority of
state-chartered credit unions. At MyCreditUnion.gov, NCUA also educates the public on consumer protection and financial literacy issues.