ASU’s falling under ASC Topic 326 Update 2016-13 —Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
This update was subsequently updated ASU2018-19, 2019-15, 2019-11, 2020-03, 2022- 02 Effective Date: Public entities that are U.S. Securities and Exchange Commission filers, this update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For all other entities, as amended by ASU 2019-10, fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Cooperative Impact Assessment: ASC Topic 326 is expected to have moderate impact on farmer cooperatives. The most significant impact will be to those cooperatives carrying Available-for-sale debt securities, trade receivables, and/or, those that offer financing programs to their members. Guidance is to move from an “incurred loss” standard to a “current expected” loss standard. This guidance impacts the evaluation of allowance for credit losses, allowing cooperatives to utilize forward looking information in the calculation. There will be more of an impact on cooperatives carrying long-term receivables vs short-term receivables.
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