Journal Article

In-depth: can FASB get loan loss accounting just right?

Abstract: The Financial Accounting Standards Board (FASB) recently released a proposal that would change the way financial institutions set aside funds to cover losses on loans, debt securities and other assets. Under current accounting rules, the allowance for loan and lease losses is based on incurred losses; the new model, if adopted, would require the allowance to be established for losses expected over the life of the loan based on current and future economic conditions, historical losses, and other factors.

Keywords: Bank loans; Financial Accounting Standards Board;

Bibliographic Information

Provider: Federal Reserve Bank of St. Louis

Part of Series: Central Banker

Publication Date: 2013

Issue: Spring

Order Number: 2