United States

Financial instruments: In-depth analysis of standard on credit losses


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In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Our white paper, Financial instruments: FASB issues new standard on credit losses, provides entities with answers to the following key questions:

  • Who is affected by the new guidance? In other words, what entities must apply the new guidance?
  • How are credit losses related to the following accounted for under the new guidance:
    • Financial assets measured at amortized cost (e.g., held-to-maturity debt securities, loans, accounts receivable)?
    • Off-balance-sheet credit exposures?
    • Available-for-sale debt securities?
  • How does the new guidance compare to existing guidance?
  • What disclosures are required under the new guidance?
  • When must the new guidance be applied?
  • What method must an entity use to transition to the new guidance?
  • What should entities be doing now to prepare for implementation of the new guidance?

While the new guidance is not effective for some time, entities should not wait to understand the new guidance and the effects it will have on the financial statements. Obtaining that understanding sooner rather than later will provide for a smoother transition and allow for more timely communications with stakeholders about how the new guidance will affect the financial statements. Use our white paper to start obtaining the understanding you need.


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