The “transition resource group” approach worked so well for the new revenue recognition standard, the Financial Accounting Standards Board has seated a new group to help implement the pending standard on credit losses.

FASB appointed 16 heavy hitters in the accounting and financial services world to the new Transition Resource Group. Members hail from accounting firms PwC, KPMG, EY, Deloitte, Grant Thornton, and Crowe Horwath, as well as banking and insurance entities like Allstate, Citigroup, Wells Fargo, and others. Representatives of several banking regulators will observe the group’s activities, as will the Securities and Exchange Commission and the Public Company Accounting Oversight Board. FASB member Larry Smith will chair the group.

Much as the TRG for revenue recognition has operated, the credit loss TRG will solicit, analyze, and discuss implementation issues that arise as entities prepare to implement the credit losses standard. Where the group identifies difficult issues that might potentially require standard-setting attention, it will refer those questions to FASB for its consideration.

When the standard is finalized, it will establish a new, more forward-looking approach for how entities must recognize impairments on credit instruments in financial statements. FASB’s “current expected credit loss” model will require entities to estimate credit losses they anticipate in their loan portfolio and recognize that expected loss at the inception of a given credit instrument. The International Accounting Standards Board elected a different model that doesn’t require recognition until an instrument starts to exhibit signs of trouble.

The group will meet for the first time on April 1, although FASB has not yet opened the portal through which entities or individuals will be able to pose questions, nor has FASB published the final standard. The agenda for the first meeting will focus on whether the measurement guidance around the credit loss model clearly communicates FASB’s intentions. The final standard is expected in mid-2016.

The board decided to establish the group to help the board proactively address stakeholder concerns related to implementation and operationality of the new standard, said FASB Chairman Russ Golden in a statement. “As the TRG discusses these issues, the board can decide if it should take additional steps to provide educational materials on specific areas of concern, or if it needs to clarify the standard accordingly.”

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