FASB Proposes Targeted Transition Relief for Credit Losses Standard

By Regulatory News

February 07, 2019

FASB issued exposure draft for a proposed Accounting Standards Update (on Topic 326) that would ease transition to the credit losses standard by providing the option to measure certain types of assets at fair value. The amendments in this proposed update amend the transition guidance of Topic 326 and would apply to all reporting entities within the scope of that Topic. Stakeholders can review and provide comments on the proposal by March 08, 2019. FASB also proposed the taxonomy improvements associated with the proposed changes in this exposure draft.

In June 2016, FASB had issued the Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The credit losses standard introduced the expected credit losses method for measuring credit losses on financial assets measured at amortized cost, replacing the previous incurred loss method. It also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis. Some stakeholders—including auto financing institutions that extend credit to borrowers with limited or impaired credit histories—noted that certain financial statement preparers have begun (or are planning) to elect the fair value option on newly originated or purchased financial assets that have historically been measured at amortized cost. They noted that electing the fair value option would require them to maintain dual measurement methods—fair value measurements and amortized cost basis.

To address this issue, the proposed Accounting Standards Update would allow preparers to irrevocably elect the fair value option, on an instrument-by-instrument basis, for eligible financial assets measured at amortized cost basis on adoption of the credit losses standard. This would increase the comparability of financial statement information provided by institutions that otherwise would have reported similar financial instruments using different measurement methodologies, potentially decreasing costs for financial statement preparers while providing more useful information to investors and other users. Additionally, for entities that have not yet adopted the amendments in Update 2016-13 as of the issuance date of a final update of these proposed amendments, the effective date and transition methodology would align with that in Update 2016-13. For entities that have adopted the amendments in Update 2016-13 as of the issuance date of a final update of these proposed amendments, FASB will determine the effective date and transition requirements for the amendments in this proposed update after it considers stakeholder feedback on this proposed update.

The provisions of this Exposure Draft, if finalized as proposed, would require improvements to the U.S. GAAP Financial Reporting Taxonomy. FASB welcomes comments on these proposed improvements to the Taxonomy through Proposed Taxonomy Improvements. After FASB has completed its deliberations and issued a final Accounting Standards Update, the proposed improvements to the Taxonomy will be finalized as part of the annual release process.

Related Links

Comment Due Date: March 08, 2019

Keywords: Americas, US, Accounting, Banking, Topic 326, Accounting Standards Update, Credit Losses Standard, Taxonomy, IFRS 9, Financial Instruments, FASB

ESMA Publishes Supervisory Convergence Work Program for 2019

MAS Consults on Amendments to the Banking Act


News FDIC Consults on Approach to Resolution Planning for IDIs FDIC approved an Advance Notice of Proposed Rulemaking (ANPR) and is seeking comment on ways to tailor and improve its rule requiring certain insured depository institutions (IDIs) to submit resolution plans. April 22, 2019 WebPage Regulatory News
News FDIC Specifies Submission Timeline for FFIEC 031, 041, and 051 Reports FDIC published the financial institution letters (FIL-21-2019 and FIL-22-2019) that offer guidance on submission of Call Reports FFIEC 051, FFIEC 041, and FFIEC 031 for the first quarter of 2019. April 19, 2019 WebPage Regulatory News
News US Agencies Propose to Revise Call Reports FFIEC 031, 041, and 051 US Agencies (FDIC, FED, and OCC) proposed to revise and extend, for three years, the Call Reports FFIEC 031, FFIEC 041, and FFIEC 051. April 19, 2019 WebPage Regulatory News
News US Agencies Propose to Amend Rule on Supplementary Leverage Ratio US Agencies (FDIC, FED, and OCC) are proposing to revise the capital requirements for supplementary leverage ratio, as required by the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act. April 18, 2019 WebPage Regulatory News
News EP Resolution on Proposal for Sovereign Bond Backed Securities The European Parliament (EP) published adopted text on the proposal for a regulation of the European Parliament and of the Council on sovereign bond-backed securities (SBBS). April 16, 2019 WebPage Regulatory News
News HKMA Decides to Maintain Countercyclical Capital Buffer at 2.5% HKMA announced that, in accordance with the Banking (Capital) Rules, the countercyclical capital buffer (CCyB) ratio for Hong Kong remains at 2.5%. April 16, 2019 WebPage Regulatory News
News EP Approves Agreement on Package of CRD 5, CRR 2, BRRD 2, and SRMR 2 The European Parliament (EP) approved the final agreement on a package of reforms proposed by EC to strengthen the resilience and resolvability of European banks. April 16, 2019 WebPage Regulatory News
News PRA Finalizes Policy on Approach to Managing Climate Change Risks PRA published the policy statement PS11/19, which contains final supervisory statement (SS3/19) on enhancing banks’ and insurers’ approaches to managing the financial risks from climate change (Appendix). April 15, 2019 WebPage Regulatory News
News PRA Seeks Input and Issues Specifications for Insurance Stress Tests PRA announced that it will conduct an insurance stress test for the largest regulated life and general insurers from July to September 2019. April 15, 2019 WebPage Regulatory News
News EBA Single Rulebook Q&A: First Update for April 2019 EBA published answers to nine questions under the Single Rulebook question and answer (Q&A) updates for this week. April 12, 2019 WebPage Regulatory News

RESULTS 1 - 10 OF 2944

By Regulatory News

Previous Article

Next Article