FASB Requires Expanded Disclosures on Credit Quality of Financing Receivables
The Journal of Accountancy reports "FASB Requires Expanded Disclosures on Credit Quality of Financing Receivables." A few quick points from the article:
- Short-term accounts receivable, receivables measured at fair value or lower of cost or fair value, and debt securities are exempt from the update.
- The update primarily addresses financing receivables, which include loans, lease receivables and other long-term receivables.
- Effective dats - For public companies, the amendments that require disclosures as of the end of a reporting period are effective for periods ending on or after Dec. 15, 2010. The amendments that require disclosures about activity that occurs during a reporting period are effective for periods beginning on or after Dec. 15, 2010. For nonpublic companies, the amendments are effective for periods ending on or after Dec. 15, 2011.
This update is a clear reaction to the global financing crisis. It doesn't change measurement, but requires increased disclosure. I've always been a believer in good, clear disclosure and in that regard I have an open mind on this update.
Joel M. Ungar, CPA is a lifelong resident of the Detroit area and a graduate of The University of Michigan. He is a principal with Silberstein Ungar, PLLC, a Top 15 auditor of SEC public reporting companies. Joel writes observations on different matters and especially on working with and using LinkedIn. He thinks he has a sense of humor.