The adoption date for CECL or ASC 326, Financial Instruments – Credit Losses, is fast approaching for private companies, as calendar-year companies are required to adopt CECL on January 1, 2023.
The adoption of the Current Expected Credit Losses, or CECL, took effect for calendar year Public Business Entities (PBEs) on January 1, 2020.
While there is no magic formula for transitioning a company from “fact finding” to the “CECL sanctioned” state, we have outlined an adoption roadmap that can be tailored for the idiosyncrasies inherent in every business.
On November 19, 2018, the FASB issued an Exposure Draft, Codification Improvements – Financial Instruments, to clarify guidance involving credit losses (Topic 326), derivatives and hedging (Topic 815) and recognition and measurement of financial assets and liabilities (Subtopic 825-10).