FASB is seeking comments on a proposed Accounting Standards Update (ASU) intended to improve the accounting for purchased financial assets, requiring that all the assets — with certain limited exceptions — follow an existing gross-up approach.
The proposed ASU seeks to change Topic 326, Financial Instruments — Credit Losses, which provides criteria for identifying purchased financial assets with credit deterioration.
Since the issuance of its standard on credit losses in 2016, FASB received feedback that it should reconsider the accounting for purchased financial assets. FASB will accept comments on the proposed ASU through Monday, Aug. 28.