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Financial Services

FASB Financial Instruments Standard Issued

After spending the past decade working to simplify the accounting for financial instruments, the Financial Accounting Standards Board (“FASB”) has issued its long-anticipated guidance, Accounting Standards Update (ASU) No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. FASB Chairman Russell Golden said the new standard will provide more useful information to financial statement users, and improves the accounting model to better address economic complexities. When the project initially started, the FASB attempted to overhaul the accounting for financial instruments. Things took a turn after the 2008 financial crisis, and the final standard. Read More.

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FASB Discusses Impairment of Financial Assets Project

During the Financial Accounting Standards Board’s (“FASB”) December 21st meeting, the board continued redeliberations on its proposed Accounting Standards Update, Financial Instruments—Credit Losses (Subtopic 825-15). In particular, the FASB discussed the following issues: Accounting for Purchased Financial Assets with Credit Deterioration (PCD Assets). The FASB determined that when the credit losses allowance is estimated without a method that discounts future anticipated cash flows, the allowance should be based on the average of the PCD asset. When the credit losses allowance is estimated with a method that discounts future anticipated cash flows, entities should use the discount rate that associates the. Read More.

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FASB Urged to Complete Asset Impairment Standard

Speaking at the American Institute of Certified Public Accountants’ (“AICPA”) Banking Conference on Wednesday, September 16th, Federal Reserve chief accountant Steve Merriett pressed the Financial Accounting Standards Board (“FASB”) to complete its oft-delayed asset impairment standard. Merriett said the standard needs to be finished soon so the implementation process can begin, but the FASB has noted that it may rush through the last stages to meet its deadline. The FASB is scheduled to issue the standard based on proposed Accounting Standards Update No. 2012-260, Financial Instruments—Credit Losses (Subtopic 825-15), by the end of the year. Expected in the standard is. Read More.

Review Panel Submits 1,100 Comments for FASB’s Financial Instruments Project

Financial Accounting Standards Board (“FASB”) staff members are currently reviewing over 1,100 comments regarding the late-stage drafts of its final standards for financial instruments. Hoping to meet its year-end publication deadline, the accounting board enlisted 29 panelists as part of a “fatal flaw” review process for feedback on the standards. Reviews generally take a few weeks to complete, but the FASB is taking a more detailed approach due to the standards’ complexity and significance. Of the 1,100 comments submitted, approximately 900 addressed issues concerning the asset impairment standard. The standard, which focuses on writing down bad loans and debt securities,. Read More.

U.S. Banks Seek Additional Guidance for Write-Downs

Showing concern for the Financial Accounting Standards Board’s (“FASB”) planned standard for writing down credit losses, the American Bankers Association (“ABA”) has asked U.S. bank regulators to create guidance associated with the accounting proposal. In a letter last month discussing the Basel Committee on Banking Supervision’s proposal Guidance on Accounting for Expected Credit Losses, ABA vice president Michael Gullette said banks are worried that there will be intense pressure to follow the guideline even if some parts are not related to the FASB’s final standard. The FASB’s final standard is likely to be based on proposed Accounting Standards Update No.. Read More.