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New Developments Summary: FASB reviews TRG for Credit Losses issues

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This New Developments Summary reviews the issues discussed at the Nov. 1, 2018, meeting of the Transition Resource Group for Credit Losses (TRG). The TRG was formed by the FASB to help businesses implement guidance for measuring credit losses for financial instruments.

The TRG addressed technical inquiries on whether gross write-offs and recoveries were mandatory annual disclosures to comply with ASC 326, Credit Losses. The TRG discussed whether ASC 326 was clear about the application of the “partial accounting” method when estimating the allowance for credit losses. Also, the group discussed changes in foreign-exchange rates on foreign-currency-denominated securities.

The TRG also reviewed some issues submitted by stakeholders, including these questions:

  • Could an entity consider expected contractual extensions in certain situations other than an expected troubled debt restructuring?
  • Could a business entity consider forecasted economic conditions and other data beyond the contractual term of a financial asset when estimating expected credit losses?
  • How should a business choose which “vintage” lines-of-credit to present that convert to term loans?

Download our New Developments Summary and read Grant Thornton’s full report on this meeting.

Contact Graham Dyer
Partner
Accounting Principles Group
T +1 312 602 8107