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FASB Agrees on Guidance for Troubled Debt Restructurings

The Financial Accounting Standards Board (“FASB”) plans to clarify its guidance for troubled debt restructurings under Accounting Standards Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. During its September 6 meeting, the FASB agreed that lenders should assess the impact of the restructuring when the individual troubled loan is known. In certain situations, banks are free to make estimates based on historic data, which the FASB refers to as a “portfolio-level” approach. FASB member Christine Botosan remarked that the decision allows banks to estimate troubled debt restructurings earlier, wherein the estimation. Read More.

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Bank Regulators Add Guidance for FASB Credit Loss Standard

Several bank regulators have updated their interpretive guidance regarding the Financial Accounting Standards Board’s (“FASB”) credit loss standard. The revised guidance from Federal Deposit Insurance Corporation, Federal Reserve, the National Credit Union Administration, and the Office of the Comptroller of the Currency will be added to the December 2016-published frequently asked questions document that explains why the FASB issued Accounting Standards Update No. No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new guidance addresses how to handle subjective information when banks estimate their loss reserves when applying ASU No. 2016-13. In. Read More.

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Banks Express Concerns over FASB Credit Loss Standard

Banking institutions of all sizes are preparing to implement the Financial Accounting Standards Board’s (“FASB”) new standard that requires the calculation of future losses on bad loans versus disclosing losses that have already occurred. While the largest accounting update in years for banks requires an additional workload, some lenders are uncertain about how to sift through their data for estimating future losses and setting aside cash reserves. At the American Institute of Certified Public Accountants’ National Conference on Banks & Savings Institutions last week, Federal Savings Bank executive vice president and CFO James Brannen touched on the difficulties a small. Read More.

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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 to Address Troubled Debt Restructurings for Credit Loss Standard

Happening early next month is a discussion on the Financial Accounting Standards Board’s (“FASB”) new banking requirements for calculating losses on bad loans. The discussion on Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, is expected to clarify how banks and auditors should account for troubled debt restructurings. At the heart of ASU No. 2016-13, which is considered the FASB’s main response to the 2008 financial crisis, is estimating credit losses. One interpretation of the standard suggests troubled debt restructurings to be assessed on a portfolio basis, but. 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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