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| Image Source: soxfirst.com |
Intending to encourage both the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) to settle their differences on the issue of credit loss standards for the purpose of converging financial instruments, 15 US banks have written a letter stating their wishes to the chairmen of the FASB and the IASB.
Last year, after initially agreeing on some proposed changes to the standards, the FASB and the IASB ended their meeting without coming to a compromise. Since then, both institutions have released divergent drafts regarding their proposed changes to the standards, especially to loan loss provisioning and expected credit losses for loan impairment.
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| Image Source: european-business-journal.com |
Recognizing that all the players and movers in the financial marketplace are going global, the banks, which include Capital One, JP Morgan Chase, and Bank of America, realized that there is a need for a common set of high-quality credit-impairment standards. Although they realize that reconciling different points of view of the two institutions may be difficult, they believe that coming to an agreement on what those standards should be is more important, as loan impairment is a big part of credit risk management.
| Image Source: aei.org |
Isidor Hefter, CPA, specializes in tax planning and research for both corporations and individuals with high net worth. He is also adept at estate tax planning and providing representation for the Internal Revenue Service and other state and local government organizations. More information about his services can be found at this website.
