FASB's Credit Loss Recognition Proposal - A Quick Look
On December 20, 2012, the Financial Accounting Standards Board (FASB) issued the exposure draft of a proposed Accounting Standards Update (ASU), "Financial Instruments - Credit Losses (Subtopic 825-15)," substantially revising the impairment model as part of its ongoing convergence effort with the International Accounting Standards Board (IASB).
Industry experts discuss the interpretations and possible implications of this proposal on bank balance sheets, earnings, and capital position. Particular attention is placed on comparing the current Allowance for Loan and Lease Loss (ALLL) process to the proposed ALLL process and the impact of allowance upon adoption.
January 24, 2013