The International Accounting Standards Board
(IASB) and the US Financial Accounting Standards Board (FASB) have
issued proposals for accounting for impairment of financial
Currently IFRSs and US GAAP account for credit
losses using an incurred loss model, which requires evidence of a
loss before financial assets can be written down.
The IASB and FASB have now proposed moving to
an expected loss model to provide a more forward-looking approach
to how credit losses are accounted for to better reflect the
economics of lending decisions.
The aligned proposals are a supplement to an exposure draft
published by the IASB in November 2009 and a separate FASB exposure
draft published in May 2010, and are part of the ongoing
The deadline for public comment is 1