FinREC issues working drafts on credit loss accounting issues

A new guide focuses on lenders and insurance companies.

The AICPA Financial Reporting Executive Committee (FinREC) recently issued working drafts of accounting issues related to implementation of FASB's new standard for accounting for credit losses.

Accounting Standards Update No. 2016-13, Financial Instruments — Credit Losses, requires more forward-looking information to be considered when estimating the amount to be held in reserve as an allowance for credit losses.

FinREC is developing a new accounting and auditing guide related to credit losses that focuses on lending institutions and insurance companies. When the working drafts are approved, they will be included in the guide.

As part of the development process for the guide, FinREC is seeking informal comments on the following working drafts:

  • Issue No. 1, Zero Expected Credit Losses.
  • Issue No. 22, Reversion Method: Estimation vs. Accounting Policy.

Informal feedback can be submitted by email to Jason Brodmerkel by Oct. 10.

RESOURCES

Keeping you informed and prepared amid the coronavirus crisis

We’re gathering the latest news stories along with relevant columns, tips, podcasts, and videos on this page, along with curated items from our archives to help with uncertainty and disruption.

SPONSORED REPORT

Getting leases in line

ASC Topic 842 is a relatively simple standard that can mean profound changes for organizations with leases. This report examines what makes this standard challenging and describes new ways for CPAs to add value.