Loans and investments
Accounting guide , PwC US
We've updated our Loans and investments guide to incorporate guidance relating to equity investments, foreclosures and sales of real estate, presentation and disclosure and transition.
This guide was issued in October 2016. Certain sections were updated in May 2017 and October 2018.
Our Loans and investments guide provides guidance on the accounting for loans and investments, including the recognition of interest income and impairment. Certain sections of the guide have been updated to improve clarity, to reflect the most recent interpretive guidance, and for recent standard setting, including ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (which is effective beginning in 2018) and ASU 2016-13, Measurement of Credit Losses on Financial Instruments (effective beginning in 2020). Our guide assumes these new standards have already been adopted.
Our Loans and investments guide discusses:
- Accounting for debt and equity investments including the impairment of equity securities without a readily determinable fair value
- Accounting for investments in insurance contracts
- Classifying and accounting for loans and accounting for the associated loan fees and costs
- Recognizing interest income on loans and investments
- The current expected credit loss (CECL) model and its application to loans, held-to-maturity, held-for-investment, and held-for-sale debt securities, and other instruments
- Accounting for loans and investments purchased with credit deterioration (PCD)
- The accounting for troubled debt and other loan restructurings
- Financial statement presentation and disclosure of loans and investments
- Foreclosures and sales of real estate
May 2017 and October 2018 updates to the Loans and investments guide
Certain updates were made to incorporate guidance relating to equity investments, transfers of loans between held for investment and held for sale, foreclosures and sales of real estate owned, presentation and disclosure and transition. See Appendix D, Summary of significant changes, for information on these updates.
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