FASB to Reconsider TDR, Purchased Loan Accounting Under CECL

The Financial Accounting Standards Board today voted to add two key bank accounting projects to its technical agenda. The first project may eliminate troubled debt restructuring accounting for companies that have implemented the CECL standard, as FASB board members signaled that it could be replaced by a robust loan modification disclosure framework. FASB also voted to reconsider its CECL accounting for loans purchased with credit deterioration, or PCD. Among other things, investor feedback indicated that PCD accounting did not provide decision-useful information.

ABA has been advocating change to both the TDR and PCD accounting since the CECL standard was issued in 2016.