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ARTICLE · 11 OCTOBER 2023

Current Expected Credit Losses (CECL) – What Is That?!

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In 2016, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments...

United StatesAccounting and Audit
Kelly Buchheit
Kelly Buchheit
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In 2016, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, otherwise known as "the new credit loss standard" or "CECL." The new credit loss standard was issued largely in response to the banking crises experienced over the past decade plus. As a result, this ASU significantly impacts financing reporting for banks and financial institutions. However, this does not mean that other types of entities will not be impacted. Most other entities will be impacted by the amendments in the ASU, just at a much lesser extent than banks and financial institutions.

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