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Nichols Calls for More Clarity on Loan Loss Accounting Standard

Posted on 1/14/2016

In a letter to the Financial Accounting Standards Board yesterday, ABA President and CEO Rob Nichols called for more clarity on the proposed Current Expected Credit Loss accounting standard, highlighting several key concerns that must be addressed before the standard can take effect. The main concern, being, whether or not banks will be able to implement CECL, and whether the model would improve accounting for credit impairment.

"We believe the goal of scalability is linked to simplicity, which is extremely important both for banks and users of their financial statements," Nichols wrote. "However, it is difficult to see how most community banks can implement a non-complex CECL model that will pass audit or examination muster in this environment."

To read the letter visit: http://www.aba.com/Advocacy/LetterstoCongress/Documents/RussellGolden-FASB-011316.pdf



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