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To the Point - FASB proposes guidance for measuring credit losses for private companies and certain NFPs


Overview

Our publication discusses the FASB’s proposal that would allow private companies and certain not-for-profit (NFP) entities to elect a practical expedient and an accounting policy for measuring credit losses on current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers. The practical expedient would allow entities to assume that current economic conditions as of the balance sheet date will persist through the forecast period in the development of a reasonable and supportable forecast. An entity that elects the practical expedient would also be allowed to make an accounting policy election to consider cash collection activity after the balance sheet date but before the financial statements are available to be issued when estimating expected credit losses for these assets. Comments are due by 17 January 2025.

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