Pub. 11 2016-2017 Issue 3

September/October 2016 15 Extraordinary Service for Extraordinary Members. one or more securities that are not subject to contractual restrictions on transfer and is required by law, contract, or regulation to prepare GAAP financial statements (including footnotes) andmake thempublicly available periodically (e.g., pursuant to Section 36 of the Federal Deposit Insurance Act and Part 363 of the FDIC’s regulations). For further information on the definition of a PBE, refer to FASB Accounting Standards Update 2013-12, Definition of a Public Business Entity, issued in December 2013. 9 FRB, FDIC, OCC, NCUA Joint Statement on the New Accounting Standard on Financial Instruments—Credit Losses (June 2016). 10 See Guidance. 11 “Future supervisory guidance, outreach, and communication will be forthcoming during the implementation period.” SR Letter 16-12: Interagency Guidance on the New Accounting Standard on Financial Instruments – Credit Losses, Kansas City Federal Reserve (July 2016). 12 Attributed to Mark Twain. we’re Always CLOSE BY NetWorks is the Electronic Funds Transfer (EFT) service provider that Nebraskans have used and learned to trust like family for over 30 years. Since our offices are right here in Nebraska, you can count on us to provide quick and personalized service for all of your EFT needs. Give us a call and let’s talk about how we can simplify EFT for you. You will talk with a fellow Nebraskan and not some automated system. www.netseft.com Toll Free 800-735-6833 Local 402-434-8202 • Determining how and when to begin collecting the additional data that may be needed for implementation. • Planning for the potential im- pact of the new accounting standard on capital. By getting started now and develop- ing models and analyzing results prior to adoption, banks will be able to gauge the impact of CECL and have discus- sions with their regulator about the expected impact. Banks need to make sure that the ways in which they intend to comply with CECL mesh with their regulators’ expectations. So, it is up to your bank to use its time wisely, know- ing that controlling andmoderating any eventual pain of CECL lies in smart and early planning. Mark Twain said it best: “The secret to getting ahead is getting started. The secret of getting started is breaking your complex, overwhelming tasks into small manageable tasks, and then starting on the first one.” 12  For more information, contact Jeff Makovicka at Kutak Rock LLP at (402) 346-6000 or jeff. makovicka@kutakrock.com . Makovicka is a member of Kutak Rock LLP’s banking practice group where he concentrates on bank matters. 1 ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326), Financial Accounting Standards Board (June 16, 2016). 2 January 13, 2016, letter by Rob Nichols, CEO of the American Bankers Association, to FASB Chairman Russel Golden. 3 Although this article primarily addresses CECL with respect to a bank’s loans, CECL also affects a variety of other assets such as debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, and reinsurance receivables. 4 See Guidance (defined herein). Also, Fed economists concluded in a recent study that smaller banks have historically been afforded more accounting leeway than big banks. Tailoring in the Application of Regulatory Accounting Guidelines: Evidence From Community Banks, Dahl, Meyer, and Neeley, Federal Reserve Bank of St. Louis (June 2016). Both Comptroller of the Currency Thomas J. Curry (Sept. 16, 2013) and Federal Reserve Board Chairman Janet L. Yellen (May 1, 2014) have spoken publicly of the need for an impairment model that does not require complex modeling processes for community banks. 5 See FASB’s Current Expected Credit Loss Model for Credit Loss Accounting (CECL): Background and FAQs for Bankers, American Bankers Association (June 2016). 6 See Guidance. 7 An SEC filer, as defined in GAAP, is an entity that is required to file its financial statements with the SEC under the federal securities laws or, for an FDIC-insured depository institution, the appropriate federal banking agency under Section 12(i) of the Securities and Exchange Act of 1934. 8 A PBE that is not an SEC filer would include (1) an entity that has issued securities that are traded, listed, or quoted on an over-the-counter market, and (2) an entity that has issued