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.