Call Report Changes for March 2023
The early adoption period for Accounting Standards Codification (ASC) Topic 326: Financial Instruments – Credit Losses (CECL) has ended. Credit unions are required to adopt ASC Topic 326 in fiscal years beginning after December 15, 2022. The word "early" was removed in all references to adoption of ASC Topic 326 in the Call Report Form and Instructions.
In July 2021, the NCUA Board issued a final rule facilitating the transition of federally insured credit unions to the CECL methodology. NCUA regulation §702.703 (opens new window) (You will be leaving NCUA.gov and accessing a non-NCUA website. We encourage you to read the NCUA's exit link policies. (opens new page).) provides a phase-in period for the day-one adverse effects on regulatory capital that may result from the adoption of CECL. In Schedule G, the CECL Transitional Amount, calculated by the credit union based on the definition in §702.703(b), will be reported in Account NW0002 along with the date of adoption in Account NW0001. CUOnline will calculate and pre-populate the CECL transition provision in Account NW0004. During the three-year transition period the provision will be automatically added to net worth and assets when calculating the net worth ratio for Prompt Corrective Action. Credit unions that early adopted CECL will report the same adoption date and one-time adjustment to undivided earnings in Accounts NW0001 and NW0002, respectively, that were reported in December 2022.
The amendments to ASC 326 in Accounting Standards Update 2022-02 are also effective for fiscal years beginning after December 15, 2022. Credit unions that have adopted ASC 326 will no longer report troubled debt restructured loans in Schedule A, Section 2, Accounts 1000F and 1001F. Instead, they will report loan modifications to borrowers experiencing financial difficulties in Accounts 1000F and 1001F. The Call Report Instructions provide additional information about loan modifications to borrowers experiencing financial difficulties.
In the Non-Interest Income section of the Statement of Income and Expense, we removed the reporting requirement for other hedged items from Account IS0047. Correspondingly, we removed the reporting requirement for gains or losses associated with Derivative Hedges in Schedule B, Section 4, Account IS0026.
Schedule C, Section 4 was modified to improve reporting of Borrowing Arrangements. Credit unions are required to report Total Borrowing Capacity, Draws Against Borrowing Capacity, and Assets Pledged to Secure Borrowing Capacity from each identified source. Additionally, reporting Borrowing Capacity Not Reported in Borrowing Arrangements was eliminated from Schedule C, Section 4 and Promissory and Other Notes was eliminated from Schedule C, Section 5.