​CECL for Non-Financial Institutions

August 2022

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In 2016, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance to estimate credit losses on financial assets, with staggered effective dates commencing in January 2020. While banks and other traditional financial institutions will be most affected by the FASB’s new credit impairment model for financial assets based on current expected credit loss (“CECL”), all entities with balances due (e.g., trade receivables) or that have an off-balance-sheet credit exposure (e.g., financial guarantees) will be impacted. These include companies in the consumer and retail industry, manufacturing entities and other non-financial institutions. This publication summarizes key aspects of the CECL standard typically applicable for non-financial institutions in a simplified Q&A format.