FASB Extends Comment Deadline on Proposal for Accounting for Credit Losses—Accounting Web, PwC, KPMG, More

Key Concern is that FASB and IASB Continue Work Towards Common Standard

The Financial Accounting Standards Board (FASB) voted March 28 to extend the comment deadline for its proposal to improve financial reporting on expected credit losses on loans and other financial assets held by banks, financial institutions, and other public and private organizations, as FASB and the International Accounting Standards Board (IASB) continue to work toward a common standard.  The new comment deadline on Proposed Accounting Standards Update, Financial Instruments – Credit Losses (Subtopic 825-15) is May 31, 2013. The decision to extend the deadline came in response to stakeholder requests for more time to consider the FASB’s proposals on credit losses, on the heels of FASB’s release of its “Frequently Asked Questions” document issued March 25.

“The FASB decided to extend the comment period on its credit losses proposal in response to stakeholders’ requests for more time to consider this important issue,” stated FASB Chairman Leslie F. Seidman. “Given our strong desire for a converged standard, the FASB encourages stakeholders to also consider the proposal issued by the IASB, which differs in some respects, and to share your views on the appropriate path forward.”

The FASB’s proposed model would utilize a single “expected credit loss” measurement objective for the recognition of credit losses, replacing the multiple existing impairment models in U.S. generally accepted accounting principles (GAAP). The current models generally require that a loss be “incurred” before it is recognized. Under the FASB proposal, management would be required to estimate the cash flows that it does not expect to collect using all available information, including historical experience and reasonable and supportable forecasts about the future.

Read the whole article here. 

FASB Solicits More Comments on Accounting For Credit Losses

See Also:

• FASB Extends Comment Deadline on Proposal for Accounting for Credit Losses on Financial Assets —FASB (3/28)
• In brief: FASB Issues Q&A and Extends Comment Period for Credit Impairment Proposal (No. 2013-16) —pWc (3/28)
• FASB Extends Comment Deadline on Proposal for Accounting for Credit Losses on Financial Assets —NewsBlaze (3/28)
• FASB Extends Comment Deadline on Proposal for Accounting for Credit Losses on Financial Assets —Yahoo! Finance (3/28)
• FASB Extends Comment Deadline on Credit Loss Proposal —Accounting Today (3/28)
• FASB Extends Comment Deadline for Financial Asset Credit Losses —KPMG (3/28)
• FASB Extends Comment Deadline on Proposal for Accounting for Credit Losses on Financial Assets —Fort Mill Times (3/28)