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The Financial Accounting Standards Board’s (FASB) final version of its “Current Expected Credit Losses” standard under U.S. generally-accepted accounting principles (US GAAP), which FASB plans to issue in the fourth quarter of this year, is likely to require credit unions to increase their loan loss reserves significantly once it is phased in. FASB’s new rules would move US GAAP’s credit loss accounting from the currently applicable “incurred loss” approach to a forward-looking “expected loss” approach where an institution estimates its future losses and recognizes them on an accounting basis even if those losses have not yet occurred.   

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