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AICPA proposes papers on credit losses interpretations

Tammy Whitehouse | August 10, 2018

The accounting profession is digging into the new accounting standard on credit losses and suggesting some implementation approaches with two draft documents circulating for public review and comment.

The American Institute of Certified Public Accountants has formed a task force to explore implementation issues that are arising particularly in the financial services and insurance sectors as they prepare to adopt Accounting Standards Update No. 2016-13. That’s the new standard on reflecting credit losses in financial instruments, which requires companies to follow a “current expected credit losses” model for determining how to reflect debt instrument performance in financial statements.

The new CECL model, codified in Accounting Standards Codification Topic 326, replaces the current “incurred loss model” by telling companies to take a more forward-looking approach to booking loan...

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