Maybe We Should Just Let the Banks Write Their Own Loan Loss Accounting Rules

Banks really appreciate the effort to move away from the recognition of losses as they occur approach, FASB, but:   

The American Bankers Association has published a “frequently asked questions” document reacting to FASB's approach. The group sees FASB's proposal as an improvement over the existing requirement, but still has concerns. “While the incurred loss model has its problems, ABA believes a (life of loan) expected loss model applied to healthy loans — subject to how it is interpreted — could have adverse consequences,” the ABA says. The group worries about the reliability of forecasts stretching past the first year, and the volatility that could ensue as a result.

There's just no pleasing some people.

[CW]

 

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

Related articles

BKD Poaches Someone From FASB and Issues a Press Release

It’s fairly common for midtier accounting firms to raid the Big 4 to fill managing director, principal, and partner positions. We’ve seen it happen several times since May. Dixon Hughes Goodman did it, not once but twice. Blumshapiro did it. So too did Andersen and Mazars USA. Hell, even RSM and Grant Thornton have done […]

Sorry, Lease Accounting Rules Don’t Care That You’re Trying to Keep Patients Alive

The Wall Street Journal recently checked in with the CFO of Genesis Healthcare to see how the transition to the new lease accounting standard is going. Not good, apparently: Genesis Healthcare Inc., a Kennett Square, Pa.-based post-acute health-care provider, for instance, had to chase down hundreds of small equipment leases, finance chief Tom DiVittorio said. Mr. DiVittorio […]