The Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) provided certain temporary optional financial reporting relief to specific entities related to the applicability of the troubled debt restructuring (TDR) accounting model by lenders and the adoption of the current expected credit losses (CECL) model by certain financial institutions. If the $900 billion COVID-19 relief bill recently passed by the U.S. Congress is signed into law by the President, the temporary optional relief would be extended as follows:   

• TDR relief. The end date for the relief related to a financial institution, including an insurance company, electing to suspend both of the following for qualifying modifications would be extended from the earlier of December 31, 2020 or 60 days after the national emergency concerning COVID-19 declared by the President terminates to the earlier of January 1, 2022 or 60 days after the national emergency concerning COVID-19 declared by the President terminates: (a) application of Subtopic 310-40, “Receivables – Troubled Debt Restructurings by Creditors,” of the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification to loan modifications related to the COVID-19 pandemic that would otherwise be categorized as a TDR and (b) any determination of a loan modified as a result of the effects of the COVID-19 pandemic as being a TDR, including impairment for accounting purposes. 
• CECL relief. The end date for an insured depository institution, bank holding company or any affiliate thereof not being required to comply with Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, including the CECL methodology for estimating allowances for credit losses, would be extended from the earlier of December 31, 2020 or the date the national emergency concerning COVID-19 declared by the President terminates to the earlier of the first day of the fiscal year beginning after the national emergency terminates or January 1, 2022. 

Entities affected by the TDR relief and (or) the CECL relief should closely monitor developments related to the President signing the previously mentioned $900 billion COVID-19 relief bill recently passed by the U.S. Congress, as well as any related information that may be provided by the staff of the U.S. Securities and Exchange Commission, the FASB or banking regulators.