Addressing concerns raised by accountants and other stakeholders, FASB recently issued narrow-scope improvements to its new accounting standard for credit losses.
The new Accounting Standards Update (ASU) provides clearer guidance regarding implementation of the new credit losses standard, ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.
The new ASU explains how to report expected recoveries and reinforces existing guidance that prohibits organizations from recording negative allowances for available-to-sale debt securities.