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At a glance

The FASB has issued amendments to clarify, correct, or improve the new credit losses standard. The amendments include:

  • New guidance related to expected recoveries for purchased financial assets with credit deterioration,
  • Transition relief relating to troubled debt restructurings,
  • Additional disclosure relief related to accrued interest, and
  • Clarification related to the application of the practical expedient for financial assets secured by collateral maintenance provisions.

On November 26, 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses. This ASU amends guidance originally introduced or amended by ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.
After the recent deferral, the credit losses standard is effective in 2020 for calendar year-end public business entities that meet the definition of an SEC filer (excluding smaller reporting companies) and 2023 for all other calendar year-end entities (e.g., other public business entities, SEC filers that are smaller reporting companies, private companies). See In depth US2019-19 for information about the FASB's deferral of the effective date for CECL and other major standards.
For entities that have not adopted ASU 2016-13, the amendments are effective when an entity adopts ASU 2016-13. For entities that have early adopted ASU 2016-13, the amendments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted as long as an entity has early adopted ASU 2016-13.

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