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In-depth: can FASB get loan loss accounting just right?

Author

Listed:
  • Gary S. Corner
  • Michelle Clark Neely

Abstract

The Financial Accounting Standards Board (FASB) recently released a proposal that would change the way financial institutions set aside funds to cover losses on loans, debt securities and other assets. Under current accounting rules, the allowance for loan and lease losses is based on incurred losses; the new model, if adopted, would require the allowance to be established for losses expected over the life of the loan based on current and future economic conditions, historical losses, and other factors.

Suggested Citation

  • Gary S. Corner & Michelle Clark Neely, 2013. "In-depth: can FASB get loan loss accounting just right?," Central Banker, Federal Reserve Bank of St. Louis, issue Spring.
    • Handle: RePEc:fip:fedlcb:y:2013:i:spring:x:1
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    Cited by:

    1. Dr B. Valentine Arulanandam & Dr C. Selvan & K. Li Shin, 2020. "The Liquidity Impact on Bond Calculation on Credit Losses: A Malaysian Banks’ Perspective," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 10(2), pages 79-115.

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