FASB on Thursday proposed to delay indefinitely the effective date of new disclosures about troubled debt restructurings in Accounting Standards Update (ASU) no. 2010-20 for public-entity creditors. Currently, the new standard is scheduled to become effective for interim and annual reporting periods ending on or after Dec. 15, 2010.
Comments on the proposal are due Dec. 24.
The
board said the proposal is a response to constituents’ concerns that
the introduction of new disclosure requirements (paragraphs
310-10-50-31 through 50-34 of the FASB Accounting
Standards Codification) about troubled debt restructurings
in one reporting period followed by a change in what constitutes a
troubled debt restructuring shortly thereafter would be burdensome
for preparers and may not provide financial statement users with
useful information.
The
delay would apply to all public-entity creditors that modify
financing receivables within the scope of the disclosure
requirements about troubled debt restructurings in ASU no. 2010-20.
For nonpublic entities, the disclosures would still be scheduled to
go into effect for annual reporting periods ending on or after Dec.
15, 2011.
The
amendments are included in Proposed ASU, Receivables
(Topic 310): Deferral of the Effective Date of Disclosures about
Troubled Debt Restructurings in Update No. 2010-20. FASB said
constituents asked the board to defer the effective date of the
disclosure requirements for public entities about troubled debt
restructurings in ASU no. 2010-20, Receivables (Topic 310):
Disclosures about the Credit Quality of Financing Receivables and
the Allowance for Credit Losses, to be concurrent with the
effective date of the guidance for determining what constitutes a
troubled debt restructuring, as presented in the Proposed ASU,
Receivables
(Topic 310): Clarifications to Accounting for Troubled Debt
Restructurings by Creditors.
The board said the delay would give it time to complete its deliberations on what constitutes a troubled debt restructuring. The effective date of the new disclosures about troubled debt restructurings for public entities and the guidance for determining what constitutes a troubled debt restructuring would then be coordinated. The board said the guidance for determining what constitutes a troubled debt restructuring is anticipated to be effective for interim and annual periods ending after June 15, 2011.
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