FASB Proposes Changes to TDR Accounting, Vintage Disclosures

The Financial Accounting Standards Board today proposed to eliminate its accounting guidance for troubled debt restructurings, or TDRs, while enhancing certain loan disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. The proposal would apply to all companies that have implemented the current expected credit loss standard for loan loss accounting.

The proposal would “require that an entity evaluate (consistent with the accounting for other loan modifications) whether the modification represents a new loan or a continuation of an existing loan,” FASB said. “The proposed amendments would enhance existing disclosure requirements and introduce new requirements related to modifications of receivables made to borrowers experiencing financial difficulty.”

Additionally, FASB proposed to require public business entities to disclosure current-period gross write-offs by year of origination in the vintage table. This proposal would affect PBEs with investments in financial receivables that have adopted CECL. Comments on the proposals are due Dec. 23.