Financial Instruments: Credit Losses (ASC Topic 326) & Current Expected Credit Loss (CECL) Model

Overview: 

The FASB’s New Standard on Credit Losses changes the accounting rules for impairment of financial instruments by adding a CECL model based on expected losses rather than incurred losses. This seminar will:

  • Provide you a detailed explanation of the New Standard and its key provisions
  • Help you understand the intricacies and challenges involving implementation
  • Show you how to identify existing data gaps, and determine potential changes to internal controls and processes for adopting the New Standard
  • Illustrate financial statement disclosure requirements
  • Summarize key differences between the FASB’s requirements and the three-stage expected credit loss model of IFRS 9, Financial Instruments
Objective: 

To update financial professionals on the new accounting rules in ASC Topic 326 for recording and disclosing estimated credit losses and impairment of Available-For-Sale (AFS) debt securities. You’ll gain an understanding of the New Standard’s goals, learn what changes to implement in preparation of adoption, and discover how to effectively and accurately estimate, measure and report credit losses.

Emphasis: 
  • Current guidance on impairment for AFS and Held-To-Maturity (HTM) debt securities
  • ASU 2016-01: Recognition and Measurement of Financial Assets and Liabilities, effective January 1, 2018 for public business entities
  • SAB 74 disclosure requirements for adoption of new accounting standards
  • New financial instruments credit loss standard in ASC Topic 326, including various implementation guidance examples
  • IFRS 9: financial instruments and significant differences with US GAAP
  • Potential SEC comment letters and auditor concerns
Bottom
Prerequisite: 

Basic knowledge of financial instruments and financial accounting and reporting.

Preparation: 

No advance preparation required.

Level of Knowledge: 

Intermediate.

CPE Credit: 
8.00
NASBA Field of Study: 
Accounting