Not-for-Profits and the Current Expected Credit Loss (CECL) Model
The current expected credit loss (CECL) model, introduced by FASB in ASU 2016-13, aims to simplify US GAAP and recognize credit losses more promptly. It addresses the limitations of the previous model by requiring immediate recognition of estimated expected credit losses based on historical data and current economic conditions. Not-for-profits, specifically, will appreciate that the CECL model excludes contributions (pledges) receivable.