Defining Issues  |  February 2019

FASB proposes targeted transition relief for the credit losses standard

The FASB has proposed amendments related to the credit losses standard. Entities would have more flexibility in applying the fair value option on adoption. 

Applicability

Proposed ASU

  • Companies that hold financial instruments in the scope of the credit losses standard

Relevant dates

  • February 6, 2019 – FASB issued proposed ASU
  • March 8, 2019 – Comments due on proposed ASU impacts

Key impacts

  • On adoption, an entity would be allowed to irrevocably elect the fair value option on an instrument-by-instrument basis 
  • Alternative would be available for all instruments in the scope of Subtopic 326-20 except for existing held-to-maturity debt securities 
  • If the fair value option is elected, the difference between the instrument’s fair value and carrying amount would be recognized as a cumulative-effect adjustment  

Related content

 

Also Filed Under
  • Financial Instruments FASB Project
  • Credit Losses
  • Defining Issues
  • ...

 

 

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