FASB - Status of proposed financial instrument impairment standard  

February 21: The FASB, at its February 19 meeting, continued re-deliberations on the proposed standard on financial instrument impairment—that differs from the impairment model finalized by the IASB.

The FASB also discussed nonaccrual guidance, purchased credit-impaired (PCI) assets, troubled debt restructurings (TDR), and reached the following tentative decisions:

  • Nonaccrual guidance would not be part of the impairment project.
  • The proposed PCI approach would not be applied to non-PCI financial assets.
  • Application guidance would not be provided on allocating non-credit related discounts or premiums from acquiring a portfolio of PCI assets to individual assets.
  • TDR classification would remain, and the accounting and disclosure differences between TDR and non-TDR modifications would not be in the scope of the impairment project.
  • Certain circumstances could require an increase in an asset’s cost basis upon execution of a TDR, and the corresponding amount would be recognized as an increase to an entity’s allowance for expected credit losses.

Read a February 2014 report [PDF 188 KB] prepared by KPMG LLP: Defining Issues: Redeliberations Continue on Impairment of Financial Instruments

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