Credit Impairment: Disclosures required before adoption
KPMG reminds companies of SAB 74 transition disclosures for adopting ASC 326 and provides examples of accounting policies and assumptions that a company could consider disclosing. SEC Staff Accounting Bulletin 74 requires SEC registrants to evaluate new ASUs that they have not yet adopted to determine what financial statement disclosures to make about the potential material effects of adopting those ASUs.
Applicability
ASU 2016-13 and SEC Staff Accounting Bulletin 74
- Companies that hold financial instruments in the scope of the credit impairment standard
Relevant dates
Effective immediately
Key impacts
- SEC registrants are required to disclose the potential material effects of adopting new ASUs
- These disclosures generally should include a discussion about the effect that adoption is expected to have on the financial statements
- If the effect is not known or reasonably estimable, the company discloses that fact
- A company should describe its progress in implementing the new standards and the significant implementation matters that it still needs to address
- The SEC staff expects additional and more precise quantitative and qualitative information to be disclosed as the effective date approaches
Related content
KPMG's Handbook: Credit Losses