The objective of this course is to address the changes made by ASU 2016-13 to the recording of credit losses on financial instruments. ASU 2016-13 introduces new ASC 326 and its new expected credit losses model, which replaces the current incurred loss model. ASU 2016-13 provides financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date.
Topics include reviewing examples of types of assets subject to the expected credit loss model, how to present the new allowance for credit losses on the balance sheet, consideration of historical, current, and forecasted future information to measure credit losses, how to use the new model for trade receivables, loans, and held-to-maturity debt securities, the new impairment model for available-for-sale debt securities, examples of entities under common control exempt from the model, disclosures, and more. PLEASE NOTE: Not accepted for Enrolled Agents. All course material provided. No prerequisites. Course level: Basic.
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