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Comments on the FASB's proposed improvements to CECL
Publication date: 07 Mar 2019
us PwC comment letter
March 7, 2019
Ms. Susan Cosper
Technical Director
Financial Accounting Standards Board
401 Merritt 7
PO Box 5116
Norwalk, CT 06856-5116
Re: File Reference No. 2019-100
Dear Ms. Cosper:
PricewaterhouseCoopers LLP appreciates the opportunity to respond to the FASB’s Proposed Accounting Standards Update, Targeted Transition Relief for Topic 326, Financial Instruments - Credit Losses.
We agree with the proposed amendments to Topic 326. The Appendix contains our detailed responses to the Questions for Respondents.
If you have any questions regarding our comments, please contact David Schmid at (973) 236-7247, Donald Doran at (973) 236-5280 or Chip Currie at (973) 236-5331.
Sincerely,
PricewaterhouseCoopers LLP
________________________
PricewaterhouseCoopers LLP, 400 Campus Drive, Florham Park, NJ 07932
T: (973) 236 4000, F: (973) 236 5000, www.pwc
Appendix
Question 1: Do you agree with the amendments in this proposed Update to provide entities with an option to irrevocably elect the fair value option in Subtopic 825-10 for eligible instruments that are within the scope of Subtopic 326-20, except for held-to- maturity securities, upon adoption? If not, please explain your reasoning.
Yes, we support adding an option to irrevocably elect the fair value option in Subtopic 825-10 for eligible instruments. We understand the Board’s conclusion regarding the exclusion of held-to-maturity securities from this election given the relationship between the assertion that the securities are held for collection of contractual cash flows and the perception of the usefulness of fair value information in that situation.
Question 2: Do you agree with the proposed amendment that would require that the irrevocable election of the fair value option be applied on an instrument-by-instrument basis? If not, please explain your reasoning and provide an alternative.
Yes, we support applying the irrevocable election of the fair value option on an instrument-by- instrument basis. This is consistent with the guidance in Subtopic 825-10.
Question 3: For entities that have not adopted Topic 326, should the effective date and transition requirements of the proposed amendments align with the effective date and transition requirements of the amendments in Update 2016-13? If not, please explain your reasoning and provide an alternative.
We believe this question is best addressed by financial statement preparers.
Question 4: For entities that have early adopted Topic 326, what should be the effective date and transition requirements for the proposed amendments?
We believe this question is best addressed by financial statement preparers.
Question 5: Would additional disclosures be needed for the proposed amendments, beyond the disclosure requirements in Topic 250, Accounting Changes and Error Corrections, and Subtopics 820-10 and 825-10?
We do not believe any additional disclosures should be required.
Question 6: Do you support the Board’s decision not to provided entities with an option to discontinue fair value measurements for financial assets measured at fair value through net income and instead apply the measurement guidance in Subtopic 326-20? If not, please explain your reasoning about why the measurement guidance in Subtopic 326-20 is preferable for the types of financial assets for which an entity would elect to discontinue fair value measurements.
We support the Board’s decision to not provide entities with an option to discontinue fair value measurements for financial assets measured at fair value through net income.
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