Banks Urged to Prepare for FASB Credit Loss Standard
Banking institutions are advised to act fast on implementation plans for Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326). At the AICPA National Conference on Banks and Savings Institutions last week, Louis Thompson of the Office of the Comptroller of the Currency told depository institutions to start preparing for the Financial Accounting Standards Board’s (“FASB”) current expected credit loss (“CECL”) standard. Thompson emphasized that due to the substantial changes in writing down bad loans and securities, implementation efforts should require full commitment and cooperation to ensure the new guidance is applied in a disciplined and. Read More.
Topics: American Institute of Certified Public Accountants "AICPA", Credit Loss Model "CECL", FASB Financial Instruments project, Financial Accounting Standards Board "FASB", Financial Instruments - Credit Losses (Topic 326)
FASB Nonprofit Council to Discuss Standard-Setting Projects
A web conference is scheduled today involving the Financial Accounting Standards Board (“FASB”) and its Not-for-Profit Advisory Committee (the “Committee”). The meeting will provide the Committee an opportunity to discuss recent accounting issues impacting nonprofit organizations. Committee members will also have a chance to offer feedback on the FASB’s latest projects. In particular, the FASB wants the Committee’s input on projects such as the revenue recognition of grants and contracts, nonprofit limited partnerships consolidation, and the proposed amendments to the disclosure of net periodic pension costs and net periodic postretirement benefit costs. The board is also interested in how nonprofit. Read More.
Topics: FASB, Financial Instruments - Credit Losses (Topic 326), Financial Instruments—Overall (Subtopic 825-10), Leases (Topic 842), Limited Partnerships Consolidation, Net Periodic Pension Costs, Net Periodic Postretirement Benefit Costs, Revenue from Contracts with Customers (Topic 606)
Banks to Change Practices for FASB Credit Loss Standard
A day after the Financial Accounting Standards Board (“FASB”) published its final standard for writing down bad loans and securities, federal banking regulators announced that banks will change how they set aside loss reserves under the new guidance. Regulators want banks to apply Accounting Standards Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, in a practical and reasonable manner with respect to their size and risk profile. Smaller banking institutions, for instance, are expected to modify their current allowance procedures to meet the FASB’s new requirements without using expensive and complex. Read More.
FASB Publishes Landmark Credit Loss Standard
The Financial Accounting Standards Board (“FASB”) has issued Accounting Standards Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . Published on June 16, the amendments represent the most significant change to the FASB’s guidance for writing down bad loans and securities. The updated guidance has also been added to U.S. GAAP under Topic 326, Financial Instruments—Credit Losses. This ASU removes the “probable” requirement for recognition of credit losses. The 2008 financial crisis was frequently blamed for delayed recognition of impaired loans. The new current expected credit loss (CECL) model allows entities to recognize the full amount of credit losses that are expected based on both historical and forward looking information.. Read More.
Topics: 2008 Financial Crisis, Credit Loss Model "CECL", FASB credit losses standard, Financial Accounting Standards Board "FASB", Financial Instruments - Credit Losses (Topic 326), International Accounting Standards Board "IASB", U.S. GAAP