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Journal entry — Financial instruments — FASB to continue developing current expected credit loss impairment model

Published on: Dec 19, 2013

The FASB met yesterday to discuss how to proceed with the impairment phase of its project on financial instruments and ultimately decided to continue to develop and refine its current expected credit loss (CECL) model. The Board made its decision after reviewing the staff’s presentation of four alternative impairment models for consideration along with feedback from investors on how they analyze impairment losses and how they view the Board's proposed CECL impairment model.

The other three alternatives discussed at the meeting were to develop (1) a gross-up model, (2) a truncated model, or (3) a model similar to that being developed by the IASB.

Editor’s Note: See the meeting handout for more information about the four alternatives presented by the staff.

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