Proposed FASB Rule Accelerating Recognition of Credit Loss

January 22, 2013

The Financial Accounting Standards Board (FASB) recently released an exposure draft (“Exposure Draft”)1 that proposes a new approach to accelerate the recognition of credit losses (“Proposed Rule”). The FASB perceives delayed recognition of credit losses as a weakness in current US generally accepted accounting principles (GAAP). The Proposed Rule would affect entities holding loans, debt securities, lease receivables, loan commitments, and any other receivables that represent the contractual right to receive cash and is a break from a previous FASB Accounting Standards Update (“Update”) and the International Financial Reporting Standards (“IFRS”) approach.

Read “Proposed FASB Rule Accelerating Recognition of Credit Loss.”