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To the chagrin of many, CECL is finally upon us. Credit unions will need to start reporting CECL beginning this year with their March 31 Call Reports. And while the CECL credit loss approach does not apply to available-for-sale (AFS) debt securities, the financial accounting standard – ASU 2016-13 (Topic 326), which issued CECL – did make targeted changes to GAAP that eliminates the concept of Other-Than-Temporary Impairment (OTTI) and requires credit losses on AFS debt securities to be recorded in an Allowance for Credit Losses (ACL). ACL requires credit unions to estimate and record expected credit losses on financial assets, including debt securities classified as AFS. Without the right tools and support, that's a tall order.
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