FASB said recently it will require disclosure of expected credit loss calculations to include both a discussion of the inputs and assumptions an entity considers as it estimates its expected credit loss. How the information is developed and used in measuring the expected credit loss will also be required. Where inputs and assumptions rely on forecasts, those would need to be described as well.
The board determined that allowance narrative disclosures should include a discussion of the changes in credit loss expectations. The reason for those changes, as well as a description of any changes in estimation techniques that are used and the reasoning behind those changes should be included. Companies would also need to explain any significant amount of write-offs.
Read more from Compliance Week, or FASB’s Board Summary.
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