Temporary relief for FDIC Part 363 audit and reporting requirements
FINANCIAL REPORTING INSIGHTS |
Many insured financial institutions have experienced significant asset growth due to large cash inflows from participation in the Paycheck Protection Program, the Money Market Mutual Fund Liquidity Facility, the Paycheck Protection Program Liquidity Facility, or other factors, such as other governmental stimulus efforts. Since such inflows may be temporary, the Federal Deposit Insurance Corporation (FDIC) issued an Interim Final Rule (IFR) on October 20, 2020 to address the applicability of Part 363 of its regulations regarding annual independent audit and reporting requirements for fiscal years ending in 2021.
The IFR would allow financial institutions to determine whether they are subject to the requirements of Part 363 for fiscal years ending in 2021 based on the lesser of their (a) consolidated assets as of December 31, 2019, or (b) consolidated total assets as of the beginning of their fiscal years ending in 2021. Such provisions would provide relief for the financial institutions that would otherwise incur substantial costs to develop processes and systems to comply with the annual independent audit and reporting requirements of Part 363 on a potentially short-term basis.
The IFR is effective upon publication in the Federal Register, and comments on the IFR will be accepted for 30 days thereafter.