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FASB to Review Guidance on Credit Card Receivables in October

The Financial Accounting Standards Board (“FASB”) plans to address concerns over its credit loss standard. Particularly, the FASB may attempt to clarify guidance for banks estimating the life of instruments such as credit card receivables without a specific payoff date. Accounting Standards Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, requires banks to disclose their losses on loans, certain debt securities and receivables. Financial professionals, however, haven’t reached a consensus on how to apply some of the requirements to credit card receivables. The standard calls for lenders to estimate the losses. Read More.

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FASB Rejects Pleas for More Implementation Guidance on Credit Loss Standard

As concerns mount regarding implementation of Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, the American Institute of Certified Public Accountants’ Private Companies Practice Section Technical Issues Committee (“the Committee”) wants the Financial Accounting Standards Board (“FASB”) to provide more guidance on the standard. FASB members, however, have no plans to offer additional implementation guidance. Addressing the matter this week with Committee representatives, FASB members said that the board’s credit loss standard for writing down losses on bad loans contains sufficient accounting guidance and examples. FASB Vice Chairman. Read More.

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FASB Member Says No Major Accounting Changes Coming

In the last 18 months, the Financial Accounting Standards Board (“FASB”) has issued Accounting Standards Updates (“ASU”) for leases, credit losses, and revenue recognition. FASB member Christine Botosan, however, stated last week that the board has no immediate plans to publish additional major accounting changes. During the American Institute of Certified Public Accountants’ Not-for-Profit Conference in Maryland, Botosan assured attendees by announcing the board’s plans to pause on adding major accounting standards to its agenda. Botosan said the FASB is considering undertaking other significant accounting projects, but is also aware of how much effort goes into complying with ASU No.. Read More.

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Treasury Report Questions FASB’s Credit Loss Standard

A June 12 report by Department of Treasury has recommended overhauling the U.S. financial regulatory system. While most of the overhaul focuses on easing bank requirements such as those from the Dodd-Frank Act, it also questions the need for the Financial Accounting Standards Board’s (“FASB”) credit loss standard. In response to the 2008 global financial crisis, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The standard addresses delayed disclosure of problematic loans that appeared healthy on banks’ balance sheets, but their loan portfolios became more troubling.. Read More.

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SEC Chief Accountant Advises Against Credit Loss Standard Delay

In an unexpected move, Wesley Bricker warned banks not to drag their feet when implementing the Financial Accounting Standards Board’s (“FASB”) credit loss standard. At Baruch College’s Annual Financial Reporting Conference, the Securities and Exchange Commission’s (“SEC”) chief accountant shared his general concerns over Accounting Standards Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Although Bricker provided few details, he did highlight how critical it is for implementation of the standard to be correct. Bricker also remarked that some bankers have approached him with their own concerns. In response, he advises. Read More.

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