Roundtable Submits Comments to FASB and SEC Regarding the Need to Suspend the New CECL Accounting Standard
March 31, 2020
On April 1, The Roundtable submitted comments to the Financial Accounting Standards Board (FASB) and the Securities and Exchange Commission (SEC) regarding the need to suspend the new Current Expected Credit Losses (CECL) accounting standard during the current COVID-19 crisis.
The new CECL standard changes the way banks calculate reserves on assets, requiring banks and nonbanking finance companies to estimate the expected loss over the life of a loan. For real estate, there is concern that this new standard will exacerbate the current liquidity crisis. Based on these concerns, we encourage the Board to suspend application of the new CECL standard for all companies until the COVID19 crisis is over. It is vital to maintain all necessary liquidity through this current crisis.