The American Institute of Certified Public Accountants (“AICPA”) has issued a new Audit and Accounting Guide to help banking institutions and insurers implement the Financial Accounting Standards Board’s credit losses standard.
Published last week, the guidance highlights key requirements of Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. It also describes the Financial Reporting Executive Committee’s (“FinREC”) understanding of customary or sole industry practice regarding certain issues. The guide notes FinREC prefers another practice outside of the customary or sole industry practice.
The AICPA said the guide will address implementation issues its Credit Loss Task Force identified and provide detailed coverage of audit considerations such as risk assessment and planning.