Board Members
Accounting for Financial Instruments Team: Credit Losses Implementation
Minutes of September 6, 2017
Board Meeting
Date: September 18, 2017
The Board meeting minutes are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue an Accounting Standards Update or a Statement of Financial Accounting Concepts.
Transition Resource Group for Credit Losses
Basis for Discussion:
FASB Memo No. 6A, Accounting for Troubled Debt Restructurings
Length of Discussion:
9:00 a.m. to 9:35 a.m. (EDT)
Board members present:
Golden, Kroeker, Siegel, Botosan, Monk, Schroeder, and Hunt
Board members absent:
Staff in charge of topic:
Other staff at Board table:
Cosper, Thornburg, Drucker, Romano, Kinley, and Cline
Outside participants:
Type of Document and Timing Based on the Technical Plan:
The Board met to discuss issues relating to the implementation of Accounting Standards Update No. 2016–13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.
Tentative Board Decisions:
Financial instruments—credit losses implementation. The Board discussed the following issues on troubled debt restructurings (TDRs) that were unresolved at the Credit Losses Transition Resource Group meeting on June 12, 2017:
  1. Topic 1: Identification of reasonably expected TDRs

  2. Topic 2: Measurement of reasonably expected TDRs.
Topic 1: Identification of Reasonably Expected TDRs
The Board agreed with the staff’s recommendation that when a loan is individually identified as a reasonably expected TDR (View B from Memo No. 6A, Addendum to Memo No. 6—Accounting for Troubled Debt Restructurings), all effects of the TDR should be reflected in the allowance for credit losses. The Board also agreed that the application of View C from Memo 6A for identification of TDRs would not be consistent with current guidance or future guidance under Topic 326 on credit losses.
(Vote: 7-0)
Topic 2: Measurement of Reasonably Expected TDRs
The Board agreed with the staff’s recommendation that at the point at which an individual loan is specifically identified as a reasonably expected TDR, an entity must use a discounted cash flow (DCF) method if the TDR involves a concession that can be captured using only a DCF method (or reconcilable method).
(Vote: 7-0)
General Announcements: None
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