FASB Discusses Multiple Projects Related to Credit Losses

At its February 2, 2022, meeting, the FASB discussed its projects on the following topics related to credit losses:

• Codification improvements — vintage disclosures: gross write-offs and gross recoveries — The Board discussed feedback on its proposed Accounting Standards Update (ASU) Financial Instruments — Credit Losses: Troubled Debt Restructurings and Vintage Disclosures and affirmed its decisions to require (1) public business entities to “disclose current-period gross writeoffs, but not gross recoveries, by year of origination within the vintage disclosure required by [ASU] 2016-13” and (2) the prospective transition approach. The Board directed its staff to begin drafting a final ASU for a vote by written ballot.
• Targeted improvements to the accounting for troubled debt restructurings for creditors — The Board made tentative decisions related to recognition and measurement, disclosures, transition and effective date, and cost-benefit analysis and directed its staff to begin drafting a final ASU for a vote by written ballot.
• Acquired financial assets — The Board began its initial deliberations and made tentative decisions related to acquired financial asset accounting, scope of asset classes and acquisition type, and seasoning. The Board directed the staff to perform additional research and outreach related to the accounting for acquired financial assets.
• Postimplementation review — The Board decided not to defer the effective date of ASU 2016-13, Financial Instruments — Credit Losses: Measurement of Credit Losses on Financial Instruments, for nonpublic entities.