At the start of the year the US and international accounting standard-setting bodies made a pivotal announcement: They agreed to a single approach on how banks should account for losses on loans. As of this writing, the exact approach was set to be revealed by the end of January.
Some clues, though, were immediately apparent in the cryptic statement released by the International Accounting Standards Board: "The boards will propose an impairment model based on accounting for expected losses. This provides a more forward-looking approach to accounting for credit losses."
Just that statement alone was met by relief from almost all quarters that will be affected by the change: accountants; borrowers; and, finally, potential investors of some of these assets. Negotiating between two competing and possibly conflicting standards, especially as the economy struggles to right itself, was seen as nothing short of calamitous.
Recommended For You
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
