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Freed Maxick Service Delivery Update

We have implemented a phased approach for returning to our offices that allows us to modify our approach to service delivery as situations change without any service disruptions. In the meantime and in the interest of public health and the safety of our community, our teams will continue working remotely whenever possible to provide the same high-quality service you have come to expect. Utilizing state-of-the-art technology, we are committed to meeting all of your assurance, tax, and advisory needs to help you navigate a business environment filled with challenges and opportunities. To discuss a specific need that can’t be handled remotely, please contact your Freed Maxick representative directly.

Counterparty Credit Risk and Current Expected Credit Losses (“CECL”)

By Freed Maxick on April, 6 2020
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Freed Maxick

Freed Maxick provides accounting, auditing, tax and consulting services and serves public and private companies, not-for-profits and municipalities to enhance profitability, save taxes, improve accountability and preserve wealth.

COVID-19-financial-institutions-brief-header

New call-to-actionThe federal bank regulatory agencies today announced two actions to support the U.S. economy and allow banking organizations to continue lending to households and businesses:

    • Allowing early adoption of a new methodology on how certain banking organizations are required to measure counterparty credit risk derivatives contracts; and
    • Providing an optional extension of the regulatory capital transition for the new credit loss accounting standard.

The "standardized approach for measuring counterparty credit risk" rule, also known as SA-CCR, was finalized by the agencies in November 2019, with an effective date of April 1. It reflects improvements made to the derivatives market since the 2007-2008 financial crisis, such as central clearing and margin requirements. To help improve current market liquidity and smooth disruptions, the agencies will permit banking organizations to early adopt SA-CCR for the reporting period ending March 31.

Banking organizations that are required under U.S. accounting standards to adopt CECL this year can mitigate the estimated cumulative regulatory capital effects for up to two years. This is in addition to the three-year transition period already in place. 

For more details: https://www.occ.gov/news-issuances/news-releases/2020/nr-ia-2020-42.html#.XoTKlup3o3Y.email

If you wish additional guidance, we are available to discuss your issues and concerns. Connect with us here or call Freed Maxick at 716.847.2651. Please keep in mind that due to the quickly changing nature of the COVID-19 pandemic, you should always discuss changes with your Freed Maxick advisor or legal counsel. 

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