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FASB issues ASU on receivables disclosures, releases webinar on new requirements

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22 Jul 2010

The FASB has issued Accounting Standards Update No. 2010-20, Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. Companies will be required to provide more information about the credit quality of their financing receivables in the disclosures to financial statements, such as aging information and credit quality indicators. The FASB has released a webinar on the requirements, which will be available until October 2010.

The effective date differs for public and nonpublic companies:

  • For public companies, the amendments that require disclosures as of the end of a reporting period are effective for periods ending on or after 15 December 2010. The amendments that require disclosures about activity that occurs during a reporting period are effective for periods beginning on or after 15 December 2010.
  • For nonpublic companies, the amendments are effective for annual reporting periods ending on or after 15 December 2011.

On convergence with IFRSs, the ASU notes:

How Do the Provisions Compare with International Financial Reporting Standards (IFRS)?

The disclosures required by the amendments in this Update are similar, but not identical, to those required by IFRS 7 Financial Instruments: Disclosures. However, the scope of IFRS 7 includes all financial instruments, not just financing receivables and the allowance for credit losses. The FASB decided to limit the scope of this Update because it does not want to delay the improved transparency in an entity's financial statements about the allowance for credit losses and the credit quality of financing receivables.

The FASB and the International Accounting Standards Board (IASB) currently have a joint project on accounting for financial instruments, including disclosures.

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