Accounting Fix for Loan-Loss ‘Double Count’ Gets Approval (1)

The US accounting standard-setter moved to finalize a project that aims to simplify and improve loan loss financial reporting rules.

The Financial Accounting Standards Board wants to streamline guidance in the wake of concerns that a quirk in its rulebook means banks “double count” losses on healthy loans when they buy or merge with another bank. The board told its staff Wednesday to draft a final version of the plan.

“The staff has come up with a very cost-effective solution to what we clearly heard was a problem,” FASB board member Marsha Hunt said.

The project seeks ...