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. This dynamic course features enhanced discussions surrounding available-for-sale and held-to-maturity debt securities accounting guidance and covers the background, purpose, and main provisions of the new financial instruments standards. Revised to reflect updates to the standard from the Transition Resource Group process, this course addresses 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.