Financial Accounting Standards Board (FASB) issues new requirements for determining credit loss reserves.
Given the broad scope of this new guidance both financial and non-financial entities will be affected. “The new standards require entities to establish loss reserves for expected future credit losses instead of the more delayed recognition of credit losses once a significant deterioration in credit risk has occurred. If your organization is not accounting for the “Life of Loan” reserve, there may be varying degrees impact to equity”, states Ken Shilson, CPA and managing director of NABD.
Please click here for the complete FASB report.