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Surveys suggest uncertainty over compliance with CECL

Tammy Whitehouse | October 11, 2017

A pair of recent surveys sheds further light on continued uncertainty in the financial services sector over how to project credit losses in compliance with a new accounting rule.

Two-thirds of entities in the financial services sector are still assessing how they’ll be affected by radical changes in how they are required to reflect losses stemming from debt-based financial instruments in financial statements, according to a poll by KPMG. The accounting standard, set forth by the Financial Accounting Standards Board, takes effect in 2020 to require entities to take a more forward-looking approach to those investments when booking losses.

The “current expected credit loss” model developed by the FASB requires entities to use both historical...

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