FASB Proposes Narrow-Scope Improvements to Credit Losses Standard
Norwalk, CT, August 20, 2018—The Financial Accounting Standards Board (FASB) today issued a proposed Accounting Standards Update (ASU) that would amend the transition requirements and scope of the credit losses standard issued in 2016. Stakeholders are encouraged to review and provide comment on the proposal by September 19, 2018.
“The proposed ASU addresses areas of uncertainty brought to our attention by our stakeholders,” noted FASB Chairman Russell G. Golden. “It is intended to reduce transition complexity and represents our ongoing commitment to support a successful transition to our standards.”
First, the proposed ASU would mitigate transition complexity by requiring entities other than public business entities to implement it for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. This would align the implementation date for their annual financial statements with the implementation date for their interim financial statements.
Second, the proposed ASU would clarify that receivables arising from operating leases are not within the scope of the credit losses standard, but rather, should be accounted for in accordance with the leases standard.
More information about the proposed ASU can be found at www.fasb.org.
About the Financial Accounting Standards Board
Established in 1973, the FASB is the independent, private-sector, not-for-profit organization based in Norwalk, Connecticut, that establishes financial accounting and reporting standards for public and private companies and not-for-profit organizations that follow Generally Accepted Accounting Principles (GAAP). The FASB is recognized by the Securities and Exchange Commission as the designated accounting standard setter for public companies. FASB standards are recognized as authoritative by many other organizations, including state Boards of Accountancy and the American Institute of CPAs (AICPA). The FASB develops and issues financial accounting standards through a transparent and inclusive process intended to promote financial reporting that provides useful information to investors and others who use financial reports. The Financial Accounting Foundation (FAF) supports and oversees the FASB. For more information, visit www.fasb.org.