{"id":1423,"date":"2019-09-27T13:00:37","date_gmt":"2019-09-27T20:00:37","guid":{"rendered":"https:\/\/addison.lwh.dev\/insights\/non-financial-institutions-cecl-deadline\/"},"modified":"2019-09-27T13:00:37","modified_gmt":"2019-09-27T20:00:37","slug":"non-financial-institutions-cecl-deadline","status":"publish","type":"post","link":"https:\/\/addisongroup.com\/insights\/non-financial-institutions-cecl-deadline\/","title":{"rendered":"Non-Financial Institutions Are Being Impacted by The CECL Deadline"},"content":{"rendered":"\n<p>With the credit loss accounting standard update deadline coming up this December, non-financial institutions are now trying to catch up and understand the impact of how the Current Expected Credit Losses <em>or <\/em>CECL change will affect their profits. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The CECL is mainly focused on how the details of contracts and transactions are assembled.<\/h3>\n\n\n\n<p>For example, in trade receivables, there doesn\u2019t appear to be a significant change to the allowance for noncollectable trade receivables. While usually, the Financial Accounting Standards Board (FASB)  suggests using the aging schedules to determine an allowance, the CECL is broadening that method as well as others.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">All receivables now need to be considered<\/h3>\n\n\n\n<p>This means that as soon as a receivable has been recorded, an allowance calculated and designated to it.<\/p>\n\n\n\n<p>This change also\nreflects the notable transformation by the CECL in the financial services\nindustry where a new loan must receive an allowance from the initiation point.\nA comparable requirement is set for the trade receivables as well.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Considering the future economic conditions<\/h3>\n\n\n\n<p>Another noticeable\nchange that comes with the CECL\u2019s new standard is the requirement that you must\nconsider the future economic conditions when determining an allowance. Not only\nthat, but other future implications could be impactful if not properly\nconsidered.<\/p>\n\n\n\n<p>Contracts set up with\ncustomers may be initially set up as short term and low risk for CECL but if\nnot structured to consider the contract\u2019s off-balance sheet exposure a company\ncould unintentionally offer credit terms to customers that require attention\nbeyond the short-term receivable.<\/p>\n\n\n\n<p>Examples include:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Deals with terms to extend the receivable in combination with other purchases.<\/li><li>Guaranteed delivery of future purchases despite the customer not meeting a threshold with their other receivables.<\/li><li>Establishing a future purchase well in advance and extending the credit terms for those purchases before recognizing the receivable.<\/li><\/ul>\n\n\n\n<p>These situations don\u2019t typically fall under the scope of the CECL but with the details of the contracts, they could. As such, the risks of these possible impacts should be considered on a contract-level review.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Other impacts<\/h3>\n\n\n\n<p>Stemming from the\nsubsidiary transactions of third parties is the off-balance-sheet exposures\nthat could be causing an impact on the non-financial institutions. The CECL\ndoesn\u2019t directly pertain to intercompany transactions, but it could apply to\nexposures that exist for those subsidiaries.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The structural and contractual obligations <\/h3>\n\n\n\n<p>With non-financial companies, there is much more uncertainty in the corporate line items.<\/p>\n\n\n\n<p>Corporations utilize\ntheir time before the implementation date to review the deal structures that\nthey have in place and consider how they will be held accountable. Being\nprepared before the date arrives is a great way to understand how calculations\nwill be performed. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>With the credit loss accounting standard update deadline coming up this December, non-financial institutions are now trying to catch up<\/p>\n","protected":false},"author":9,"featured_media":574,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[11],"tags":[],"post_function":[],"post_audience":[],"class_list":{"0":"post-1423","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-article"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.2 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Non-Financial Institutions Are Being Impacted by The CECL Deadline - Addison Group<\/title>\n<meta name=\"description\" content=\"non-financial institutions are now trying to understand the impact of how the Current Expected Credit Losses or CECL change will affect their profits.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/addisongroup.com\/insights\/non-financial-institutions-cecl-deadline\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Non-Financial Institutions Are Being Impacted by The CECL Deadline - Addison Group\" \/>\n<meta property=\"og:description\" content=\"non-financial institutions are now trying to understand the impact of how the Current Expected Credit Losses or CECL change will affect their profits.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/addisongroup.com\/insights\/non-financial-institutions-cecl-deadline\/\" \/>\n<meta property=\"og:site_name\" content=\"Addison Group\" \/>\n<meta property=\"article:published_time\" content=\"2019-09-27T20:00:37+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/addisongroup.com\/wp-content\/uploads\/2024\/06\/AdobeStock_171059478-1024x683-1.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"683\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Addison Group\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Addison Group\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/addisongroup.com\\\/insights\\\/non-financial-institutions-cecl-deadline\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/addisongroup.com\\\/insights\\\/non-financial-institutions-cecl-deadline\\\/\"},\"author\":{\"name\":\"Addison Group\",\"@id\":\"https:\\\/\\\/addisongroup.com\\\/#\\\/schema\\\/person\\\/abc042a7f4910d20090afda67a1cd61c\"},\"headline\":\"Non-Financial Institutions Are Being Impacted by The CECL Deadline\",\"datePublished\":\"2019-09-27T20:00:37+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/addisongroup.com\\\/insights\\\/non-financial-institutions-cecl-deadline\\\/\"},\"wordCount\":455,\"image\":{\"@id\":\"https:\\\/\\\/addisongroup.com\\\/insights\\\/non-financial-institutions-cecl-deadline\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/addisongroup.com\\\/wp-content\\\/uploads\\\/2024\\\/06\\\/AdobeStock_171059478-1024x683-1.jpeg\",\"articleSection\":[\"Article\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/addisongroup.com\\\/insights\\\/non-financial-institutions-cecl-deadline\\\/\",\"url\":\"https:\\\/\\\/addisongroup.com\\\/insights\\\/non-financial-institutions-cecl-deadline\\\/\",\"name\":\"Non-Financial Institutions Are Being Impacted by The CECL Deadline - Addison Group\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/addisongroup.com\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/addisongroup.com\\\/insights\\\/non-financial-institutions-cecl-deadline\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/addisongroup.com\\\/insights\\\/non-financial-institutions-cecl-deadline\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/addisongroup.com\\\/wp-content\\\/uploads\\\/2024\\\/06\\\/AdobeStock_171059478-1024x683-1.jpeg\",\"datePublished\":\"2019-09-27T20:00:37+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/addisongroup.com\\\/#\\\/schema\\\/person\\\/abc042a7f4910d20090afda67a1cd61c\"},\"description\":\"non-financial institutions are now trying to understand the impact of how the Current Expected Credit Losses or CECL change will affect their profits.\",\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/addisongroup.com\\\/insights\\\/non-financial-institutions-cecl-deadline\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/addisongroup.com\\\/insights\\\/non-financial-institutions-cecl-deadline\\\/#primaryimage\",\"url\":\"https:\\\/\\\/addisongroup.com\\\/wp-content\\\/uploads\\\/2024\\\/06\\\/AdobeStock_171059478-1024x683-1.jpeg\",\"contentUrl\":\"https:\\\/\\\/addisongroup.com\\\/wp-content\\\/uploads\\\/2024\\\/06\\\/AdobeStock_171059478-1024x683-1.jpeg\",\"width\":1024,\"height\":683},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/addisongroup.com\\\/#website\",\"url\":\"https:\\\/\\\/addisongroup.com\\\/\",\"name\":\"Addison Group\",\"description\":\"Leading National Professional Services Firm Specializing in Talent Solutions and Consulting Services\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/addisongroup.com\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/addisongroup.com\\\/#\\\/schema\\\/person\\\/abc042a7f4910d20090afda67a1cd61c\",\"name\":\"Addison Group\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/41fd8b89179592de3fc22b9549f5021aa190e18a09da5da1ddb4db4162b682df?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/41fd8b89179592de3fc22b9549f5021aa190e18a09da5da1ddb4db4162b682df?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/41fd8b89179592de3fc22b9549f5021aa190e18a09da5da1ddb4db4162b682df?s=96&d=mm&r=g\",\"caption\":\"Addison Group\"}}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Non-Financial Institutions Are Being Impacted by The CECL Deadline - Addison Group","description":"non-financial institutions are now trying to understand the impact of how the Current Expected Credit Losses or CECL change will affect their profits.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/addisongroup.com\/insights\/non-financial-institutions-cecl-deadline\/","og_locale":"en_US","og_type":"article","og_title":"Non-Financial Institutions Are Being Impacted by The CECL Deadline - Addison Group","og_description":"non-financial institutions are now trying to understand the impact of how the Current Expected Credit Losses or CECL change will affect their profits.","og_url":"https:\/\/addisongroup.com\/insights\/non-financial-institutions-cecl-deadline\/","og_site_name":"Addison Group","article_published_time":"2019-09-27T20:00:37+00:00","og_image":[{"width":1024,"height":683,"url":"https:\/\/addisongroup.com\/wp-content\/uploads\/2024\/06\/AdobeStock_171059478-1024x683-1.jpeg","type":"image\/jpeg"}],"author":"Addison Group","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Addison Group","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/addisongroup.com\/insights\/non-financial-institutions-cecl-deadline\/#article","isPartOf":{"@id":"https:\/\/addisongroup.com\/insights\/non-financial-institutions-cecl-deadline\/"},"author":{"name":"Addison Group","@id":"https:\/\/addisongroup.com\/#\/schema\/person\/abc042a7f4910d20090afda67a1cd61c"},"headline":"Non-Financial Institutions Are Being Impacted by The CECL Deadline","datePublished":"2019-09-27T20:00:37+00:00","mainEntityOfPage":{"@id":"https:\/\/addisongroup.com\/insights\/non-financial-institutions-cecl-deadline\/"},"wordCount":455,"image":{"@id":"https:\/\/addisongroup.com\/insights\/non-financial-institutions-cecl-deadline\/#primaryimage"},"thumbnailUrl":"https:\/\/addisongroup.com\/wp-content\/uploads\/2024\/06\/AdobeStock_171059478-1024x683-1.jpeg","articleSection":["Article"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/addisongroup.com\/insights\/non-financial-institutions-cecl-deadline\/","url":"https:\/\/addisongroup.com\/insights\/non-financial-institutions-cecl-deadline\/","name":"Non-Financial Institutions Are Being Impacted by The CECL Deadline - Addison Group","isPartOf":{"@id":"https:\/\/addisongroup.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/addisongroup.com\/insights\/non-financial-institutions-cecl-deadline\/#primaryimage"},"image":{"@id":"https:\/\/addisongroup.com\/insights\/non-financial-institutions-cecl-deadline\/#primaryimage"},"thumbnailUrl":"https:\/\/addisongroup.com\/wp-content\/uploads\/2024\/06\/AdobeStock_171059478-1024x683-1.jpeg","datePublished":"2019-09-27T20:00:37+00:00","author":{"@id":"https:\/\/addisongroup.com\/#\/schema\/person\/abc042a7f4910d20090afda67a1cd61c"},"description":"non-financial institutions are now trying to understand the impact of how the Current Expected Credit Losses or CECL change will affect their profits.","inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/addisongroup.com\/insights\/non-financial-institutions-cecl-deadline\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/addisongroup.com\/insights\/non-financial-institutions-cecl-deadline\/#primaryimage","url":"https:\/\/addisongroup.com\/wp-content\/uploads\/2024\/06\/AdobeStock_171059478-1024x683-1.jpeg","contentUrl":"https:\/\/addisongroup.com\/wp-content\/uploads\/2024\/06\/AdobeStock_171059478-1024x683-1.jpeg","width":1024,"height":683},{"@type":"WebSite","@id":"https:\/\/addisongroup.com\/#website","url":"https:\/\/addisongroup.com\/","name":"Addison Group","description":"Leading National Professional Services Firm Specializing in Talent Solutions and Consulting Services","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/addisongroup.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/addisongroup.com\/#\/schema\/person\/abc042a7f4910d20090afda67a1cd61c","name":"Addison Group","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/41fd8b89179592de3fc22b9549f5021aa190e18a09da5da1ddb4db4162b682df?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/41fd8b89179592de3fc22b9549f5021aa190e18a09da5da1ddb4db4162b682df?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/41fd8b89179592de3fc22b9549f5021aa190e18a09da5da1ddb4db4162b682df?s=96&d=mm&r=g","caption":"Addison Group"}}]}},"_links":{"self":[{"href":"https:\/\/addisongroup.com\/wp-json\/wp\/v2\/posts\/1423","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/addisongroup.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/addisongroup.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/addisongroup.com\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/addisongroup.com\/wp-json\/wp\/v2\/comments?post=1423"}],"version-history":[{"count":0,"href":"https:\/\/addisongroup.com\/wp-json\/wp\/v2\/posts\/1423\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/addisongroup.com\/wp-json\/wp\/v2\/media\/574"}],"wp:attachment":[{"href":"https:\/\/addisongroup.com\/wp-json\/wp\/v2\/media?parent=1423"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/addisongroup.com\/wp-json\/wp\/v2\/categories?post=1423"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/addisongroup.com\/wp-json\/wp\/v2\/tags?post=1423"},{"taxonomy":"post_function","embeddable":true,"href":"https:\/\/addisongroup.com\/wp-json\/wp\/v2\/post_function?post=1423"},{"taxonomy":"post_audience","embeddable":true,"href":"https:\/\/addisongroup.com\/wp-json\/wp\/v2\/post_audience?post=1423"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}