Audit committee tool: Preparing for the new credit losses standard
FINANCIAL REPORTING INSIGHTS |
On May 7, the Center for Audit Quality issued Preparing for the New Credit Losses Standard: A Tool for Audit Committees, which is designed to help audit committees in their oversight responsibilities related to the implementation of Financial Accounting Standards Board Accounting Standards Update (ASU) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The tool includes an overview of the standard and questions for audit committees to ask management and the auditor related to a company’s implementation efforts.
For public business entities that are SEC filers, ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. RSM US LLP’s Current expected credit loss resource center provides information about the new guidance.