Case: The Future of Measuring Expected Credit Loss
During 2013, the FASB directed its staff to move forward with the drafting of an impairment standard containing a “Current Expected Loss (CECL) Model” with the purpose to better disclose to corporate stakeholders a net realizable measurement for financial assets and liabilities. This FASB measure came about specifically to address the concerns from the Great Recession regarding the true net value of long-term financial assets, like mortgage loan assets held by financial institutions and traded debt, such as the $30 billion in mortgage debt sold to the public during 2008 before it went bankrupt. Currently, Jed Miller is the corporate controller for ABC Corporation looking to purchase high-yielding Citibank mortgage assets at low market price.
Required: As an accountant of ABC Corporation, after reading the two articles in required reading and locating two additional peer-reviewed sources on the topic, provide an appraisal of the expected loss model for Mr. Miller of the CECL. Be sure to compare it to the allowance for doubtful accounts for accounts receivables and address the huge monetary loss the CECL model might have saved ABC Corporation, who purchased Lehman mortgage assets in 2008.
Paper must be 8-10 pages
Include 5 sources beside the one included – Cite at least 5 peer-reviewed sources with in-text cites of where the information was used…If you tell me where it was used I will add the in-text citation
Proposed Accounting Standards Update (ASU), Financial Instruments–Credit Losses (ASC 825-15) (Part 2). (cover story). (2013). GAAP Update Service, 13(4), 1-8.
In-Text: (“Proposed accounting standards,” 2013)
Weiss, J. (2013). Proposed accounting standards update: (ASU), Financial instruments–Credit losses (ASC 825-15) (Part 1) . (cover story). GAAP Update Service, 13(3), 1-8.
In-Text: (Weiss, 2013)
Schroeder, R. G., Clark, M. W., & Cathey, J. M. (2014). Financial accounting theory and
analysis: Text and cases. (11 ed.). Hoboken, NJ : John Wiley & Sons. Retrieved from http://www.coursesmart.com/9781118582794/firstsection
In-Text: (Schroeder, Clark & Cathey, 2014)
The paper should be formatted according to the APA Requirements