FASB issued an Accounting Standards Update that makes narrow-scope improvements to various aspects of the financial instruments guidance, including the current expected credit losses (CECL) standard. This update is part of the ongoing codification improvement project that is aimed at clarifying specific areas of accounting guidance to help avoid unintended application. The items addressed in this project are generally not expected to have a significant effect on current accounting practice or create a significant administrative cost for most entities.
The update, among other changes, clarifies the following:
- All nonpublic companies and organizations are required to provide certain fair value option disclosures.
- Disclosure requirements in Topic 320 apply to the disclosure requirements in Topic 942 for depository and lending institutions.
- Contractual term of a net investment in a lease determined in accordance with Topic 842 should be the contractual term used to measure expected credit losses under Topic 326.
- When an entity regains control of financial assets sold, an allowance for credit losses should be recorded in accordance with Topic 326.
Keywords: Americas, US, Accounting, Banking, CECL, IFRS 9, Disclosure, Topic 320, Topic 326, Topic 842, Credit Losses Standard, Financial Instruments, FASB
Previous ArticleESMA Publishes Supervisory Work Program for 2020
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.
The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
The Bank for International Settlements (BIS) published bulletins on lending in decentralized finance (DeFi) system, on blockchain scalability and fragmentation of crypto, and on extractable value and market manipulation in crypto and decentralized finance.
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.