US Board Moves to Streamline Purchased Loan Accounting in Update

Accounting for purchased loans got a refresh Wednesday in a move by the US standard-setter that aims to simplify rules.

The Financial Accounting Standards Board published final guidance that aims to streamline financial reporting following concerns that a quirk in the US rulebook means banks “double count” losses on healthy loans when they buy or merge with another bank.

Public input during FASB’s implementation review of its current expected credit loss (CECL) standard revealed existing rules for acquired financial assets created complexity, FASB said in a press release.

• FASB board members moved to finalize the project during an ...