SEC Calls for Attention to Credit Impairment Rules

With a new standard expected before the end of the year to change the way financial institutions account for credit impairments, the Securities and Exchange Commission will be watching for strong processes and controls around critical judgments.

SEC Chief Accountant James Schnurr told accountants at a national banking conference to prepare themselves to deal with differences between U.S. and international standards on credit impairments, learn what they can from international implementation, and take responsibility for developing robust processes and controls around the many judgments that will be required. “The development, documentation, and application of a systematic methodology used to determine credit loss estimates, as well as policies...