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.