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Learn the impact of the credit impairment standard
We address key issues facing companies during adoption
Public companies have adopted the FASB's recognition and measurement guidance and private companies are adopting throughout 2018. All are evaluating the FASB's credit losses guidance to be ready for the effective date of January 1, 2020. Explore PwC's latest thinking on not just these projects, but all financial instruments.
- For trade and other receivables, held-to-maturity debt securities, loans and other instruments, companies will be required to use the new current expected credit loss (CECL) approach that will generally result in earlier recognition of allowances for losses.
- For available-for-sale debt securities with unrealized losses, credit losses will be recognized as allowances rather than reductions in the amortized cost of the securities.
- Q1 2020 for calendar year-end public business entities that are SEC filers
- Q1 2021 for calendar year-end public business entities that are not SEC filers
- 2021 for calendar year-end nonpublic entities
Early application of the guidance is permitted in 2019 for calendar year-end entities.
Is a discounted cash flow required for available for sale securities under the new financial instruments credit loss standard? Hear the discussion.