{"id":1715,"date":"2020-04-06T15:58:04","date_gmt":"2020-04-06T19:58:04","guid":{"rendered":"https:\/\/seci.wpenginepowered.com\/?p=1715"},"modified":"2020-04-06T15:58:04","modified_gmt":"2020-04-06T19:58:04","slug":"sec-chief-accountant-issues-covid-19-statement-including-cecl-considerations","status":"publish","type":"post","link":"https:\/\/seciblog.pli.edu\/index.php\/sec-chief-accountant-issues-covid-19-statement-including-cecl-considerations\/","title":{"rendered":"SEC Chief Accountant Issues COVID-19 Statement Including CECL Considerations"},"content":{"rendered":"

On April 3, 2020, SEC Chief Accountant Sagar Teotia issued a Public Statement titled \u201cStatement on the Importance of High-Quality Financial Reporting in Light of the Significant Impacts of COVID-19<\/a>.\u201d\u00a0 In the Public Statement he addresses the Coronavirus Aid, Relief, and Economic Security Act (the \u201cCARES Act\u201d).<\/p>\n

The Cares Act, in Section 4014, provides a deferral for the Current Expected Credit Loss accounting standard (ASC 326) for insured depository institutions and credit unions insured by the National Credit Union Administration<\/strong>.\u00a0 This deferral will end when the national emergency related to the outbreak of COVID-19 ends.\u00a0 The uncertainty as to when the deferral will end presents significant tactical challenges.\u00a0This deferral has also raised hopes that the FASB might extend the deferral to other entities.<\/p>\n

The CARES Act, in Section 4013, also provides relief from troubled debt restructuring accounting for \u201cfinancial institutions,\u201d a term which is undefined in the Act.<\/p>\n

In his Public Statement, Chief Accountant Teotia states:<\/p>\n

The CARES Act, which was signed into law by the President on March 27, 2020, allows a limited number of entities the option to temporarily defer or suspend the application of two provisions of U.S. Generally Accepted Accounting Principles (GAAP).\u00a0 \u00a0OCA has received inquiries from preparers and auditors where the preparer has concluded that election of these narrow and limited options in Sections 4013 and 4014 of the CARES Act would be deemed to be in accordance with GAAP.\u00a0 For those entities that are eligible for, and elect to apply, either of Sections 4013 or 4014 of the CARES Act, the staff would not object to the conclusion that this is in accordance with GAAP for the periods for which such elections are available<\/strong>.<\/p>\n

\u00a0In this environment of uncertainty and hope, the FASB has scheduled a meeting<\/a> for April 8, 2020 to \u201cAddress Standard-Setting Issues During the Coronavirus (COVID-19) Pandemic.\u201d\u00a0 You can read about the issues to be addressed, including \u201cAgenda requests for deferral of standards\u201d in this media advisory<\/a>.<\/p>\n

So, stay tuned!<\/p>\n

In addition to the CECL deferral, the Public Statement<\/a> also addresses:<\/p>\n