In brief: FASB issues Q&A and extends comment period for credit impairment proposal (No. 2013-16)

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In brief 03/28/2013 by Assurance services
In brief: FASB issues Q&A and extends comment period for credit impairment proposal (No. 2013-16)

At a glance

On March 25, the FASB issued a document that addresses key questions about its proposed impairment model for financial assets. In addition, the FASB reached a decision at its March 28 meeting to extend the comment period for its impairment proposal to May 31, 2013.

What's new?

On March 25, the FASB issued a document that addresses key questions about its proposed impairment model for financial assets. This document can be accessed on the FASB website.

In addition, the FASB reached a decision at its March 28 meeting to extend the comment period for its impairment proposal to May 31, 2013.

What are the key provisions?

The FASB released for public comment its proposed impairment model for financial assets on December 20, 2012.1 The FASB’s new Q&A document aims to address questions the FASB has frequently received from constituents during the outreach process related to this project. The document is intended to enhance understanding of the FASB's proposal and further educate constituents as they prepare their comment letter responses.

The Q&A document is organized into three main sections: project objectives, measuring expected credit losses, and other alternative models considered by the FASB when developing the proposal.

The FASB also decided on March 28 to extend the comment letter deadline to May 31, 2013. The extension provides respondents additional time to prepare their responses and compare the FASB’s proposal to the IASB's proposed impairment model, which the IASB released for public comment in early March.2 The comment letter deadline for the IASB’s proposed impairment model is July 5, 2013.

The FASB considered extending the comment period for its proposal on classification and measurement of financial instruments, but decided not to change the current deadline of May 15, 2013.

What's next?

Companies are encouraged to review the FASB’s Q&A document as they prepare their comment letter responses. Subsequent to both comment periods, the FASB and IASB plan to discuss the feedback received on their respective models.

Questions?

PwC clients who have questions about this In brief should contact their engagement partner. Engagement teams that have questions should contact the financial instruments team in the National Professional Services Group (1-973-236-4576).

1For more information about the FASB’s proposal, refer to Dataline 2013-01, Credit losses on financial assets—An overview of the FASB’s current expected credit loss model.

2Refer to In brief 2013-13, IASB issues exposure draft on impairment of financial instruments.

Authored by:

Christopher Gerdau
Partner
Phone: 1-973-236-5010
Email: christopher.gerdau@us.pwc.com

Christopher Rickli
Senior Manager
Phone: 1-973-236-4576
Email: christopher.rickli@us.pwc.com