Change is always happening all around us, but lately I feel like it is everywhere. As we started 2018, there were significant changes to tax laws that have not seen an overhaul since 1986, which was 32 years ago! A few things have changed since 1986, with one exception—the New England Patriots played in the Super Bowl that year too (they lost to the Chicago Bears), so I guess not everything has changed.
In addition to the changes in tax laws, significant changes to generally accepted accounting standards—such as the new revenue recognition model, lease accounting, and the implementation of the current expected credit loss model (CECL), which will become effective over the next several years—are upcoming. CECL will impact all financial institutions and significantly change the allowance for loan losses calculation. Then there is the more global issue of the continued emergence of FinTech companies and what impact they will have on traditional financial institutions.
The timing of the new tax law did not give us much time to prepare in advance for the change, but as we move into 2018, Wipfli will continue to keep you informed through webinars and articles. CECL might have been easy to ignore when the standard was first released in 2016 and its implementation dates were off in the future, but implementation is inching closer each day, and given the scope of historical information that will be needed for the calculation, we recommend your bank’s management form a team to work toward a detailed implementation plan.
Change is everywhere, and it’s not going away. As always, your Wipfli relationship executive is available to help you navigate through these changes. In addition, we regularly offer webinars related to these topics. If you can’t attend a webinar, they are recorded and available on www.wipfli.com on the Insights page, or you can click here.