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FASB shortens write-down period for some debt securities

Tammy Whitehouse | March 31, 2017

The Financial Accounting Standards Board has settled on a new way for companies to write down the value of certain debt securities.

FASB published Accounting Standards Update No. 2017-08 to change the requirements under GAAP for amortizing certain purchased callable debt securities that are carried at a premium. Currently, companies typically amortize the premium as an adjustment to the yield over the contractual life of an instrument. Now companies will have to adjust to a shorter amortization period.

Users of financial statements raised concerns to FASB over the current amortization methods, first indicating different entities tend to follow different methods, which makes it more difficult...

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