FinREC issues credit loss standard working drafts
The AICPA Financial Reporting Executive Committee (FinREC) issued working drafts of accounting issues related to FASB’s new credit losses standard.
Accounting Standards Update No. 2016–13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, established a new current expected credit loss, or CECL, model that is designed to make accounting for credit losses more forward–looking.
The AICPA is publishing a guide that will help financial statement preparers implement the new standard, which represents one of the most significant changes to financial institution accounting in 40 years. The working drafts will appear in the guide when it’s published. The drafts propose helpful considerations for depository and lending institutions and insurance companies and consist of: Issue No. 21: Advances of Taxes and Insurance; Issue No. 23: Zero Expected Credit Losses Factors for Financial Assets Secured by Collateral; and Issue No. 28: Scope Exception for Loans and Receivables Between Entities Under Common Control.
Informal feedback can be submitted to Jason Brodmerkel at Jason.Brodmerkel@aicpa–cima.com by Oct. 15. •
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