The Financial Accounting Standards Board (FASB) has proposed a new accounting standard, the Purchased Financial Assets (PFA) model, to simplify the process of merger accounting under the Current Expected Credit Loss (CECL) model. The PFA model would eliminate the distinction between Purchased Credit Deteriorated (PCD) and Non-PCD financial assets in certain purchase transactions, making the decision-making process less cumbersome. However, purchase accounting will still require more effort as a CECL allowance must be calculated at or after purchase for all purchased assets. For more information, please refer to the full whitepaper “Latest FASB Proposal Makes Merger Accounting Simpler Under CECL” by Michael Umscheid, President and CEO of ARCSys.
About The Authors
Mike Umscheid
Mike has been providing accounting, consulting and auditing services to financial institutions for over 30 years. Considered the “CECL Guru”, Mike was selected by the AICPA to create and deliver their 8-hour CPE course on CECL. He is a past member of the Auditing Standards Board and a published author on Accounting and Auditing for Financial Institutions. Mike has spoken at numerous AICPA conferences as well as other national and local financial institution associations. Mr. Umscheid is also the author of the 8-hour CPE course published by the AICPA for CECL.Mike is currently the President and CEO of ARCSys, a consulting firm that specializes in Allowance for Credit Loss software and CECL.
