A Direct Line Blog

The Financial Accounting Standards Board (FASB) announced a new accounting standard in 2016, the current expected credit loss (CECL) methodology for estimating allowances for credit losses. NCUA recently released an addendum to its Other Supervisory Committee Audit, Minimum Procedures Guide to incorporate CECL, which became effective for most federally insured credit unions on January 1, 2023. For credit unions that have implemented CECL, the addendum replaces procedures based on recent changes in accounting standards from CECL for the Allowance on Credit Losses for Investments, Loans and Leases, and Off-balance Sheet Credit Exposures.

The addendum should be used in conjunction with the Other Supervisory Committee Audit, Minimum Procedures Guide. Together, these documents provide the minimum procedures to perform when a supervisory committee chooses the Other Supervisory Committee Audit option for completing its annual audit requirement under NCUA regulation § 715.7, Supervisory Committee audit alternatives to a financial statement audit. These procedures are designed to assist the supervisory committee, internal auditor, or other qualified person in completing the areas of review outlined in NCUA regulation part 715, Appendix A, Supervisory Committee Audit—Minimum Procedures.

You can also find CECL tools and information on the NCUA CECL Resources page.