NCUA Releases Simplified Excel CECL Calculator

September 2022

On Wednesday, the National Credit Union Administration (NCUA) released a tool designed to help credit unions comply with the complexity of new accounting standards to estimate future credit losses.

he Financial Accounting Standards Board changed its standard for current expected credit losses (CECL) in 2016 in response to shortcomings exposed in the 2007 financial crisis. Its adoption has been postponed a few times, most recently in March 2020 because of the financial chaos and uncertainty with the COVID-19 pandemic. The FASB staff believes that the Weighted Average Remaining Maturity (WARM) method is one of many methods that could be used to estimate an allowance for credit losses for less complex financial asset pools.

The NCUA’s new Simplified CECL Tool is intended for use by credit unions with less than $100 million in assets, although it could be used by larger credit unions based on the discretion of their management and auditors.

The Simplified CECL Tool uses the (WARM) methodology to determine the average remaining term of any loan pool, which in turn is part of the process to estimate the allowance for credit loss. FASB supports the WARM methodology, in which the percentage of each loan’s value to the total value of the pool is weighted by each loan’s remaining years to maturity.

An NCUA news release said the tool requires a credit union to enter its charter number, total assets and loan portfolio balances. The loan portfolio categories in the tool mirror the categories in the NCUA’s Call Report.

For each loan portfolio category, the tool calculates the credit union’s net charge-off rate from its call report data and provides the industry-based WARM factor. The tool also allows the credit union to make qualitative adjustments for current conditions and reasonable and supportable forecasts, as required by CECL.

The Simplified CECL Tool, along with FAQs, a user guide and information on the model used, is available on the NCUA’s CECL Resource Center website.

As credit unions evaluate their options, NCUA said the Simplified CECL Tool will be updated for use with this year’s quarters ending Sept. 30th and Dec. 31st to allow credit unions to test and calibrate the tool which will be updated each quarter.

We applaud the NCUA for providing this tool. This tool will help many credit unions comply with the new standard and at no cost. The WARM method for calculating CECL is appropriate for not only smaller asset-based credit unions, but for any credit union that has a simplified loan portfolio.


July 2022

In our last Technical Release from June 2022, we recommended the National Credit Union Administration (NCUA) to issue a new Accounting Alert. We are pleased to see they did just that on July 20, 2022. This Alert correctly states when all federally chartered (and state chartered) credit unions should adopt the Current Expected Credit Loss (CECL) standard. Below is the exact revised alert from NCUA regarding the CECL effective date.


Current Expected Credit Loss (CECL) Effective Date for Credit Unions (Revised)

This Accounting Alert supersedes the alert issued March 9, 2022.

After issuing the March 9, 2022 Accounting Alert, the NCUA determined that the term “fiscal year” - as used in the Current Expected Credit Loss (CECL) Transition Rule - should not be interpreted to mean “calendar year.” While the Federal Credit Union Act (12 U.S.C. § 1760) requires all federal credit unions to have a fiscal year ending on [the calendar year-end] December 31, the Financial Accounting Standards Board (FASB) enables an audit to be conducted on a different financial reporting year-end, such as September 30, 2023. This Accounting Alert provides notice that a federal credit union may implement CECL based on its audited financial reporting year if different than its fiscal year.

As a reminder, on February 2, 2022, FASB decided not to defer the implementation date for nonpublic entities of the Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326), commonly known as CECL. Federal credit unions and federally insured state-chartered credit unions are nonpublic entities; thus, CECL becomes effective for credit unions for fiscal years beginning after December 15, 2022.

In practice, a credit union with a financial statement reporting year ending on September 30, 2023, will implement CECL on October 1, 2023. Under the NCUA’s CECL Transition Rule, the phase-in of the day-one effects on a credit union’s net worth ratio would also start on October 1, 2023.

Federally insured state-chartered credit unions may contact their accountant or state regulator with questions on the implementation of CECL.

For additional information on CECL, please visit our CECL Resources Page.

Contact with questions not answered in the CECL Resources


June 2022

As the implementation date for the Financial Accounting Standard Board’s (FASB) Accounting Standard Codification (ASC) 326 “Financial Instruments - Credit Losses” draws near it has become clear there is trouble even with its implementation date.

For non-public business entities ASC 326 is effective for fiscal years beginning after December 15, 2022. Early application of the amendments is permitted at the beginning of a fiscal year. The implementation of FASB ASC 326 does not permit adoption at an interim period. It must be adopted as of the first day of the fiscal year beginning after December 15, 2022, which may or may not be January 1, 2023, depending upon the audit period. So, the effective date for ASC 326 will be different for each credit union depending on when the credit union has its audit performed.

For years many have considered all federal credit unions, and many state chartered credit unions, to have a fiscal year as a calendar year. This is based on wording in the Federal Credit Union Act, and many state statutes, which requires a credit union to maintain a calendar-year for purposes of books and records. However, for decades, many credit unions have engaged an auditor to perform an audit of a fiscal period other than a calendar year-end. The National Credit Union Administration (NCUA) has allowed credit unions to have any month-end as the end of their audit year and because of that the credit union industry has benefited with lower audit fees and the ability of audit firms to focus on servicing credit unions audit needs year-round. Of the 5,000 credit unions, approximately 40% have an audit period ending December 31st and 60% have an audit period other than December 31st, typically as of 12 months ending as of March 31st, June 30th or September 30th.

On March 9, 2022, the NCUA issued an “Accounting Alert.” This alert stated that all federally chartered credit unions must adopt ASC 326 on January 1, 2023, to be included in the NCUA’s Phase in Regulatory Relief Rule. That rule allows for the initial reduction of a credit union’s net worth due to CECL to be phased in over a three-year period. This puts those credit unions that are federally chartered and do not have a calendar year end audit period in a bad position. If a credit union follows the NCUA ‘s definition of a fiscal year as a calendar year, regardless of their audit date, and adopts ASC 326 on January 1, 2023, the credit union may be in a position that they would not receive a “clean” unmodified opinion on their financial statement audit without significant audit adjustments over a two-year period. Also, that credit union would have to run side by side allowance for loans losses analyses over that period of time.

We urge the NCUA to reconsider their definition of a credit union’s fiscal year end to be based on their audit period. If you are uncertain of what effective date your credit union should implement ASC 326 contact your auditor.

Agencies Issue Revised Statement on Loan Modifications by Financial Institutions Working with Customers Affected by the Coronavirus

On April 7, 2020, federal financial institution regulatory agencies, in conjunction with state financial regulators, issued a revised interagency statement encouraging financial institutions to work with borrowers affected by COVID-19. This revised statement provides additional information regarding loan modifications and also provides the agencies' views on consumer protection considerations.

The revised statement explains the relationship between the interagency statement issued on March 22, 2020, and the temporary relief provided by Section 4013 of the Coronavirus Aid, Relief, and economic Security Act which was signed into law on March 27, 2020. To learn more, click the link below to download the entire statement from the FDIC.

FASB Updates

Norwalk, CT, November 15, 2019 — Financial Accounting Standards Board (FASB) issued two Accounting Standards Updates (ASUs) that finalize various effective date delays for standards on current expected credit losses (CECL), leases, hedging, and long-duration insurance contracts.

  • ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, finalizes various effective date delays for private companies, not-for-profit organizations, and certain smaller reporting companies applying the credit losses (CECL), leases, and hedging standards.
  • ASU No. 2019-09, Financial Services—Insurance (Topic 944): Effective Date, finalizes insurance standard effective date delays for all insurance companies that issue long-duration contracts, such as life insurance and annuities.

For more information on this FASB release and others go to


April 17, 2019 - Nearman, Maynard, Vallez, CPAs participated in the Southernmost Chapter’s 3rd annual Bowl-A-Thon on April 17th at Kings-City Place Doral. It was a great evening sharing some laughs with our Credit Union affiliates while raising money for a good cause.