Michael Umscheid, CPA


    Credit Info
  • NASBA Field of Study

  • Format

    On demand

  • Level


  • CPE Credit


  • Course acronym

  • Prerequisites

  • Course duration

    6.5 Hours

Credit Impairment – Financial Instruments: Mastering the New FASB Requirements for the Allowance for Credit Loss

SKU: FIIN_19A_2 Category:
How does the guidance in the new financial instruments standards differ from current GAAP? This CPE course addresses this question by examining the core principles of the new standards. Featuring enhanced discussions surrounding available-for-sale and held-to-maturity debt securities accounting guidance, this CPE course will teach accountants in public practice and industry the background, purpose, and main provisions of the new financial instruments standards. Specifically, the course will address transition guidance, disclosure requirements, and implementation guidance. FASB's financial instruments projects reconsider classification and measurement of financial instruments, as well as issues related to impairment of financial instruments.

Challenge in Implementation

The challenge in implementation will be in collecting the significant new level of data required at the segment and class level data sets. The advantages under FASB ASU No. 2016-13 are that the amendments eliminate the probable initial recognition threshold in current GAAP and, instead, reflect an entity's current estimate of all expected credit losses.

FASB allows an entity to apply methods that reasonably reflect the entity's expectations of the credit loss estimate. FASB expects that an entity can leverage its current systems and methods for recording the allowance for credit losses. However, the inputs used to record the allowance for credit losses generally will need to change to appropriately reflect an estimate of expected credit losses and the use of reasonable and supportable forecasts.
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Topics discussed

Credit Impairment
Current expected credit loss history
Measuring expected credit losses
Bond and equity portfolios
Current expected credit loss models
Presentation and disclosure requirements

Learning objectives

Identify changes in FASB ASC 825, Financial Instruments, as a result of the new financial instrument standards on classification and measurement and impairment.
Recall key points related to the simplification of accounting requirements.
Recall significant points related to the credit loss model for financial assets for the recognition of losses.
Identify related disclosure requirements.

Who will it benefit?

Accountants in public practice and industry who need an update on the latest financial instruments guidance.