This audiocast offers a high-level overview of the proposals and investor perspectives on certain elements of the models. Access the IASB audiocast and the FASB audiocast.
The global financial crisis highlighted the need for more timely recognition of reporting credit losses on loans and other financial instruments held by financial institutions and other public and private entities. There were criticisms of the “incurred loss” model which delayed recognition of credit losses until a loss trigger event occurred. This failed to alert investors to expected credit losses in a timely manner. To address this criticism, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have issued separate proposals to change the current model. Each has proposed separate alternatives that would use more forward-looking “expected loss” approaches for recognizing losses.
This audiocast offers a high-level overview of the proposals and investor perspectives on certain elements of the models. Access the IASB audiocast and the FASB audiocast.
Please refer to previous audio casts presented.