CBA Members Urged to Send Comments on FASB’s Proposal on Accounting for Credit Losses
The Financial Accounting Standards Board is proposing a new standard for accounting for credit losses that would require banks to overhaul their current procedures. The standard, which in part is used to calculate the ALLL, focuses on “life of loan” and entails developing estimates based on past events, current conditions, and forecasts. Preliminary estimates are that the ALLL could be increased by up to 50 percent industry wide as a result of the new standard.
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