AICPA Releases Working Drafts of Accounting Issues for Implementation of the New Credit Loss Standard
August 9, 2018
New York (August 9, 2018) The AICPA’s Financial Reporting Executive Committee (FinREC) has issued several working drafts of accounting issues related to the implementation of Accounting Standards Update (ASU) No. 2016-13, Financial Instruments-Credit Losses and is requesting feedback on issue papers Zero Expected Credit Losses and Reversion Method: Estimation vs. Accounting Policy.
Current Expected Credit Loss, or CECL, is a new standard that will change how financial institutions account for expected credit losses and, is the most significant change to financial institutions in decades. It effects the allowance for credit losses reserves and requires for more forward-looking information to be considered when developing a best estimate.
The working drafts discuss helpful considerations for Depository and Lending Institutions, and Insurance Companies and are available at:
- Issue #1 - Zero Expected Credit Losses
- Issue #22 - Reversion Method: Estimation vs. Accounting Policy
Interested parties are encouraged to submit their informal feedback on the implementation issues by October 10, 2018.
Final issues will be included in a new AICPA Allowance for Credit Losses A&A Guide (with a focus on Lending Institutions and Insurance Companies).
