At its August 29, 2018, meeting, the FASB discussed whether certain targeted improvements to ASU 2016-131 should be made to reflect implementation issues discussed and recommendations that the Board’s credit losses transition resource group (TRG) made at its June 11, 2018, public meeting.2 Specifically, the FASB addressed the following topics at this week’s meeting:
- Topic 1 — Consideration of capitalized interest by using a method other than a discounted cash flow method under the current expected credit losses (CECL) model.
- Topic 2 — Refinancing and loan repayments.
- Topic 3 — Definition of “amortized cost basis” (i.e., including accrued interest in defining amortized cost basis).
- Topic 4 — Reversal of accrued interest on nonperforming financial assets.
- Topic 5 — Transfer of loans from held for sale to held for investment and transfer of credit-impaired debt securities from available for sale to held to maturity.
- Topic 6 — Accounting for recoveries under the CECL model.