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About
About
Created by the U.S. Congress in 1970, the National Credit Union Administration is an independent federal agency that insures deposits at federally insured credit unions, protects the members who own credit unions, and charters and regulates federal credit unions.
Regulation & Supervision
Regulation & Supervision
The NCUA protects the safety and soundness of the credit union system by identifying, monitoring and reducing risks to the National Credit Union Share Insurance Fund. Backed by the full faith and credit of the United States, the Share Insurance Fund provides up to $250,000 of federal share insurance to millions of account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions.
Analysis
Analysis
The NCUA’s economists and analysts compile data on the credit union system’s financial performance, merger activity, changes in credit union chartering and fields of membership, as well as broader economic trends affecting credit unions. Users can find information on a single credit union or analyze broader nation-wide trends.
Support Services
Support Services
The NCUA provides a number of support services to the credit union system, such as providing training, grants and loans, chartering, and field-of-membership services; maintaining the health and stability of Share Insurance Fund; managing the assets of failed credit unions; and providing emergency liquidity.
Consumers
Consumers
The NCUA works to protect credit union members and consumers, raise awareness of potential frauds, facilitate access to affordable financial services, and educate consumers on the importance of savings and how they can improve their financial well-being.
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News
Stay up to date on the NCUA's activities by subscribing to the NCUA's Express messages. Read press releases, speeches, testimony, and Annual Reports. Register for upcoming conferences and events.

Technical Correction for the CECL Transition Amount

23-12 / December 2023

Technical Correction for the CECL Transition Amount

Subject

Accounting

Status

Active

This alert informs credit unions about a technical correction with the calculation of the Current Expected Credit Loss (CECL) transition amount in NCUA regulations, §702.703(b)(2). Credit unions that adopted the CECL accounting standard in 2023 should use the method described below to calculate and report on the Call Report their CECL transition amount.

The Transition to the CECL Methodology (Transition Rule) recognized the need to phase in the CECL day-one adjustment on the net worth ratio. As a result, the Transition Rule phased in the day-one effects of adopting the CECL accounting standard over a three-year transition period (12 quarters).

To ensure computation alignment with the Transition Rule’s intent, credit unions should calculate the CECL transition amount for quarters 4 through 12 as the difference between:

the credit union's retained earnings as of the beginning of the fiscal year in which the credit union adopts CECL, adjusted for any restatement of the initial CECL adoption amount; and
the credit union's retained earnings as of the closing of the fiscal year immediately before the credit union’s adoption of CECL.

For credit unions that adopted CECL in the first quarter of 2023, any corrected CECL transition amount is reported in Schedule G, Capital Adequacy Worksheet, as described in the December 2023 Call Report Instructions. For more information on CECL, please visit our CECL Resources page.

For any remaining questions, please contact EIMail@ncua.gov.

Sent December 20, 2023, via GovDelivery

Current Expected Credit Losses (CECL)

Last modified on

12/21/23